Martin Lewis has shared details of a proposed new ‘social tariff’ aimed at supporting vulnerable customers through the cost of living crisis next year. Chancellor Jeremy Hunt announced that the UK Government’s £2,500 Energy Price Guarantee will increase to £3,000 from April and will be in place until the end of March 2024.
The increase and extension of the UK-wide support is aimed at protecting millions of households from soaring energy bills which are currently on track to hit £3,740 a year from April, according to energy analysts at Cornwall Insights. In a new video shared on social media, Martin Lewis explained that it has been confirmed to him that if any of Ofgem’s price cap reviews - conducted every three months - falls under the £3,000, then households will pay the cheaper price cap rate.
The founder of MoneySavingExpert.com also shared details that were not mentioned in the Autumn Statement but have been confirmed.
Martin said: ‘First of all, they will be consulting as to whether the Energy Price Guarantee could be caped based on volumetric rates, which is a way of saying you pay a cheaper rate for the first amount that you use and then if you start using quite a lot of energy, the rate will go up.”
He explained that there is a consultation on that proposal and that it could come in as part of the Energy Price Guarantee before March 2024.
But the big talking point from Martin’s 10-minute video is on the proposed introduction of a social tariff on energy.
The financial journalist said: “After April 2024 they are also consulting on moving to a social tariff system.”
This is something he has “long-championed” and is pleased to see it making progress.
Martin explained: “The most vulnerable who can’t engage in a competitive market will automatically be put on a cheaper tariff without having the need to switch on it.”
He also said that there will be no £400 energy rebate next year for those on middle incomes, they will only benefit from the £3,000 Energy Price Guarantee.
Martin also predicted that the new cost of living payments of £150, £300 and £900 will not start until next September at the earliest.
You can watch the full video on MoneySavingExpert.com here.
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