Martin Lewis issued a stark warning to every energy customer across the country on Monday following Chancellor Jeremy Hunt’s announcement that the UK Government’s £2,500 energy price guarantee will end at the end of next March. The consumer champion took to social media to advise people that energy bills look set to hit an eye-watering £4,350 from April.
The financial journalist posted on Twitter that the projected price cap after six months of the £2,500 frozen limit could go up by 75% for a household on typical, average usage. However, he added that under those same forecasts, bills are expected to go down by 15% in July to £3, 700 per year.
The early predictions came from Cornwall Insight, the energy analysts whose estimates have been on par with Ofgem’s official price cap since last year. But Martin explained that as we are not currently in the April assessment period yet, which runs from November 17-February 17, these were very early predictions and could “change a lot”.
Martin posted to his 1.8million Twitter followers: “NEWS: The projected new energy price cap, that will start in April when the price guarantee ends, will be:
“UP 73% taking a bill for typical use (use more pay more use less pay less) from £2,500/yr to £4,350
“The cap will then be DOWN 15% in July to £3,700/yr typical use.”
He continued: “Then it is predicted to stabilise around that level. However these are very early day predictions (thanks to @CornwallInsight for getting them to us so quickly), we are not even in the April cap assessment period (17/11 to 17/2) yet, so could change a lot.”
He added: “If these are in the right ballpark, the promised 'targeted help' will need to be targeted up into middle incomes for people to get through this. Especially if it stays at those levels for the next winter.”
And pointed out that “this is subject to the fact that the price cap in its old form will continue which is the standard working assumption, but not yet confirmed”.
On Monday, Jeremy Hunt said he and the Prime Minister had “reluctantly” agreed it would not be responsible to keep the energy price guarantee beyond April 2023.
The Chancellor told the Commons: “The third step I’m taking today, is to review the energy price guarantee. It is the biggest single expense in the growth plan and one of the most generous schemes in the world, it’s a landmark policy for which I pay tribute to my predecessor, my right honourable friend from Spelthorne and it will support millions of people through a difficult winter reducing inflation by up to 5%."
He continued: “So I confirm today that the support we are providing between now and April next year will not change.
“But beyond next April, the Prime Minister and I have reluctantly agreed it would not be responsible to continue exposing the public finances to unlimited volatility in international gas prices.
“So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year, the review’s objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.”
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