Martin Lewis has warned how vulnerable homes will still have to choose whether they “freeze or starve” despite the new £200 energy rebate scheme.
Households in England, Scotland and Wales will get an upfront discount on their energy bills from this October - but it will need to be paid back.
Families will start repaying the £200 at a rate of £40 per year over five years from 2023 to 2027.
This is because energy suppliers will be loaned the money to do this by the government.
The rebate was confirmed last week after the regulator Ofgem confirmed it is hiking its energy price cap by almost £700.
But speaking on LBC Radio today with Nick Ferrari, MoneySavingExpert founder Martin warned how the £200 discount won’t go far enough to support some families.
He said: "I said to the Chancellor's face last week. I think the measures he's put in place will forestall some people having to choose between whether they freeze or starve, but it is far from forestalling everybody.”
Describing the likely impact of the energy crisis over the coming months, Martin added: "I think it is a generally catastrophic situation.
“I would urge people if they're struggling to call National Energy Action or speak to Citizens Advice. Go through all the benefits and anything you’re entitled to.”
Are you worried about affording your energy bills? Let us know: mirror.money.saving@mirror.co.uk
Martin has been calling on Chancellor Rishi Sunak to scrap the £200 rebate scheme altogether, as it doesn’t give people the option to opt out.
He accused Mr Sunak of “taking a worrying gamble” by asking people to start repaying the rebate next year, when it is hoped energy bills would have fallen.
"With this scheme, the Chancellor is effectively taking a worrying gamble with people's finances," explained Martin.
"If the [energy] rates don't drop, or don't drop a lot, people will be left in a lose-lose situation, with far higher bills and an additional levy on top.
"As I doubt it's technically possible for the opt-out to be put in in time for October, I think the best thing is to scrap this scheme and try something else."
Martin said new research from YouGov, commissioned by MoneySavingExpert showed 57% of those responsible for energy bills said they would decline £200 rebate.
Just a quarter (26%) said they would actively opt into the scheme if they had the choice and the rest of the participants weren’t sure.
Researchers spoke to 1,665 adults in Great Britain for the MSE website.
The hike in the Ofgem energy price cap means those on default tariffs will see an increase of £693 from £1,277 to £1,971 from April - an eye-watering rise of around 54%.
Prepayment customers will be worse hit, with an increase of £708 from £1,309 to £2,017.
The £200 rebate - which Martin describes as a "loan-not-a-loan" - is applied directly to your bill, or you’ll be given a credit note, if you’re on direct debit payments.
If you're on prepay, the government will pay the cash through your smart meter or they'll give you a voucher or a cheque.
