Martin Lewis: Existing Government help on energy bills now totally swallowed up by October price cap rise – more support is needed desperately
MoneySavingExpert.com founder Martin Lewis has called on the two remaining Conservative Party leadership candidates to take immediate action over spiralling energy costs on the day they enter Number 10 – otherwise the risk to people's mental and physical health will be "unthinkable". Martin's plea comes as energy regulator Ofgem today confirmed the energy price cap will rise by 80%.
Martin commented on the new price cap rates in a series of numbered posts on Twitter – we've preserved the formatting below. You can also read the original thread. You can see our October price cap confirmed story for more info on what's happening and what you can do, or use our new tool to check what you'll pay.
In addition, you can watch Martin's live appearance on LBC on Friday 26 August where he discussed the political will to curb energy bills - and what he'd do to help.
Martin Lewis, founder of MoneySavingExpert.com, said: "In May, the Government announced decent help based on a predicted 42% rise in the October to April energy price cap (that’d take a typical bill to £2,800).
"Now the rise for that period's likely to be 126% (£4,460 for a typical bill). Please read why & my plea to the new Prime Minister.
"1. In May, the Government announced an up to £1,200 for vulnerable homes (£400 for all homes) package of energy help, based on a predicted 42% rise in the energy price cap in October (taking a typical bill to £2,800).
"2. Crucially this was to cover the six-month October to April cap.
"3. Ofgem then changed the rules so price caps would only be three months long (to protect energy retailers’ cash flows to stop ‘em going bust – we objected in our consultation response).
"4. The actual 1 October rise is now crystallised at 80%, taking typical direct debit bill to £3,549 a year.
"5. In January a further 51% rise is predicted by Cornwall Insight taking a typical bill to £5,386 a year.
"6. The January prediction is likely in the right ballpark as we are seven months through the 10-month assessment period.
"7. This means while the help announced in May was based on a rise of 42%, the average rise for the same six-month period over the two caps is 126%.
"8. Thus the projected yearly cost for a typical home is likely to be £1,660 a year more than the £900 a year rise then thought.
"9. Over the winter six-months alone that means a typical household will have to find a further £880 on top of the help level given. Though in fact energy prices aren't expected to drop substantially even after that – high rates will likely last at least to the end of 2023.
"10. These rates are mathematically unaffordable for many. The full new state pension is £9,600 a year, the older one £7,400 a year, and remember many pensioners have higher than typical use. Bills are an even bigger proportion for many on benefits and with disabilities.
"This is why, Liz Truss or Rishi Sunak, on the day you become PM I beg, plead, pray you will bridge that gap. If not the physical and mental health risk to millions is unthinkable.
"And if the package is right, as I did in May, I'll be the first to applaud. Please help."
If you are worried about paying your energy bills this winter – or you're already struggling – don't suffer in silence. There is help out there. Your provider is required to help if you're falling behind on bills (usually by setting up a payment plan), many have charitable funds to help those in debt, and there are charities that give one-on-one advice. For more info, see our full Struggling with energy bills? guide.
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10 September 2024
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