‘Unaffordable’ price hikes to energy bills are coming, Martin Lewis says
The consumer champion says millions of households could soon have to pay an extra £600
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Your support makes all the difference.Consumer expert Martin Lewis has warned “unaffordable” price hikes to energy bills are on the way, saying they could rise by 50 percent in April.
Speaking on ITV’s Money Show, Mr Lewis said millions of households face having to fork out an extra £600.
As global gas prices continue to soar, a cap limiting how much energy providers can charge for variable rate deals is set to be reviewed – and will almost certainly rise.
Around 65 percent of UK homes are on variable rate energy tariffs. Fixed tariffs used to be cheaper, but this is no longer the case, and more than half of households are now on a default, price-capped tariff.
Mr Lewis told viewers on Thursday: “In the past, I used to warn against being on the price cap because it was more expensive.”
But he explained it is now “far far cheaper”.
He added: “The vast majority of people should still be doing nothing and sticking to the price cap.”
But some firms might offer existing customers cheap deals on fixed rates, so they should not be ruled out entirely, Mr Lewis said.
He advised it would only be worth taking out a fixed rate deal is if it is no greater than 40% more expensive than the current price-capped tariff.
Until April, customers are protected by the cap, which forces energy suppliers to sell gas and electricity below the cost price. It limits the amount customers can be charged to £1,277 per year for the average household.
But the cap, set by the energy regulator Ofgem, is changed twice a year and will be updated in April. Experts predict it could be hiked as high as £1,995.
The new level for the price cap is set to be announced on 7 February.
Mr Lewis has previously said the “seismic” hit to household energy bills could mean some people will be forced to decide whether eat or heat their homes. He has called for political intervention to support struggling customers.
But Downing Street says it is not currently planning to help keep energy prices down for customers.
The Prime Minister’s official spokesman said: “I’m not aware of any further changes at the moment, but obviously we keep it under review, we are listening to those most affected.”
The comments came as ministers met with representatives of the energy industry to try to tackle the cost-of-living squeeze and prevent more suppliers from going bust.
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