Martin Lewis says there is 'good and bad news' in the latest predictions over how much households could be paying for their energy next year. He said the average household could be looking at a yearly bill of £3,700 after the energy price guarantee comes to an end in March.
Last month, it was announced that the two-year energy price freeze, which sees the average household pay a yearly bill of £2,500, will now run for just six months. The guarantee, which caps the price per unit of energy, will be reviewed following the winter with targetted support introduced from April 2023, the government said.
Money saving expert Martin Lewis suggested that the end of the energy price guarantee will likely see a return to the energy price cap, set by Ofcom. The energy price cap was expected to jump from £1,971 to £3,549 a year from October 1, before the government stepped in to freeze prices.
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However, with support now coming to an end after just six months, analysists have predicted what the price cap may be for April if it is reinstated. Experts at Cornwall Insight say bills will be around £3,700 on average - up by £1,200.
Mr Lewis said there is both good news and bad news from the prediction. Despite the large rise, it is less than what had been predicted before the price guarantee came in.
Mr Lewis tweeted to his followers this afternoon: "Bad & good news. It's early days but @CornwallInsight's latest prediction for the April price cap (which returns then unless govt changes rules) is a 48% rise; taking a (meaningless but illustrative) typical bill to £3,700/yr from £2,500 Yet its less than the 72% predicted be4."
The government has previously said that without the price guarantee, energy bills had been expected to hit £3,500 from October rising as high as £6,500 next year.
It comes amid fears that an “already worrying” number of people are self-disconnecting from pre-payment energy meters - and the number could spike amid increasing cost-of-living pressures. Andy Brown, chief executive of Citizens Advice Manchester, said people must not spend the winter “too scared, too frightened to turn the heating on”.
The charity is predicting that in January – a month where finances are typically tight for many – some pre-payment customers will need to find an estimated £360 a month for their energy or risk being cut off. The charity said it wants to see targeted support for those on the lowest incomes, with clearer guidance on what help will be available after April.
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