Martin Lewis has said that "energy bills are set to rise before they fall" as he appeared on Good Morning Britain (GMB) this morning (January 16).
Discussing the current cost of living crisis, and more specifically energy bills, the financial guru who runs Money Saving Expert (MSE) said that people should prepare for their bills to get "higher" before they fall.
Ahead of his popular The Martin Lewis Money Show on ITV and STV for those in Scotland, the expert explained why this is the case.
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Talking via video from his London home, Martin Lewis said that wholesale rates are rates at which gas and electricity retailers buy energy from gas and electricity suppliers. It is those suppliers who make the "huge profits" often discussed by members of the public, he said.
Explaining graphs that are being shared online, Martin Lewis said that often people look at the graphs showing a rapid drop however the issue with this is that people are using the wrong graph. "They are looking at the day ahead prices which is pretty irrelevant in the UK" he added.
Telling people that the "year ahead" graphs are the better ones to look at, the financial guru continued; "If you look at that, wholesale rates have dropped very rapidly compared to the height of the start of the Ukraine conflict. But there is still well over three times the traditional run rate it used to be. So let's not overblow this.
"What we have to remember in the UK, let's be very plain, we have nationalised energy prices. The vast majority of people in England, Scotland and Wales are on an energy price guarantee tariff - that is where the price is currently set by the government - not even the regulator.
"And what we pay right now is staggeringly, even though it's incredibly expensive, even though it is double last winter, a subsidised rate.
"If I take somebody on typical usage and there isn't really such thing it's just the easiest way to explain, our bills right now are £2,500 a year on typical use, they would be £4,279 if we were on the price cap. So the gap between the two of those is the subside from the state - the amount the government had decided the state will pay towards everybody's energy bills, rich and poor."
Talking about what's to come for billpayers in April, juts a few months away, he explained that on April 1, "the current plan is that it will go up to £3,000. So everyone will see a 20 per cent rise. And it will then stay at £3k for a year - for 12 months - until April 2024.
"The only chance it will get cheaper, is if the energy price cap which is the price the regulator used to set, which is currently at £2,500, was to drop below the energy price guarantee. Now the current prediction, based on energy wholesale rates, and the energy price cap is set on wholesale rates so this is the one which may get lower, is in April [going to lower rates]... no.
"But from July, because it moves every three months, depending on which company's predictions you look at, that £3k could drop to somewhere between £2,500 and £2,800."
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