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Nottingham Post
Nottingham Post
Entertainment
Victoria Scheer & Tom Vigar

Martin Lewis issues warning over 'staggering' energy bills changes in January

Martin Lewis has warned that some households will face another hike in their energy bills in January. It comes as millions are already struggling with soaring costs.

The news may come as a shock, as many people are expecting their bills to remain the same until April, as the Government has introduced an energy price guarantee until then. The policy means some of the cost of energy is subsidised by the state, meaning bills for an average household will not rise above £2,500.

Each unit of electricity is capped at 34p instead of 67p, and each unit of gas is just 10.3p instead of 17p, YorkshireLive reports. That means that households that use more than average amounts of energy will still pay more.

READ MORE: The 50p Tesco item Martin Lewis urges shopper to buy before end of month

Without the support, a typical household would be spending £4,279 a year on energy, instead of the £2,500. However, the policy only lasts until the end of March, at which point bills are expected to rise to £3,000.

But speaking on ITV's Good Morning Britain, Mr Lewis warned that prices are set to change in January, which he said 'people will find this staggering'. "We know in April energy prices are going to go up 20 per cent for everyone but after crunching some numbers last night, prices are also going to change in January." He added.

"They are going to be a little lower for some people, not much change for many but those on prepayment meters and those who pay in receipt of bills are going to see increases. And depending where you live those increases could be relatively significant."

He continued: "If you pay by monthly direct debit, on average what you pay won't change but each region does tweaks. The real hit here is for people on prepayment meters and payment in receipt of bills."

Mr Lewis said that on average, people affected would see an increase of just under one per cent. This would mean a typical bill of £2,559 rising to £2,580.

People paying in receipt of bill will see an increase of 1.58 per cent, meaning that group's current average of £2,715 would rise to £2,758. Below is a full breakdown - put together by MoneySavingExpert.com - of what people on different payment methods currently pay on average in different parts of the country, and the change they will see in January.

Region Monthly Direct Debit:
Cost per year
(% change on current price)
Prepayment -
Cost per year
(% change on current price)
Pay on receipt of bill:
Cost per year
(% change on current price)
North West £2,468
(-0.2%)
£2,546
(+0.6%)
£2,720
(+1.3%)
North England £2,434
(-0.5%)
£2,519
(+0.4%)
£2,684
(+1%)
Yorkshire £2,472
(0%)
£2,554
(+0.8%)
£2,724
(+1.4%)
North Scotland £2,474
(-0.3%)
£2,555
(+0.4%)
£2,726
(+1.1%)
South England £2,501
(-0.5%)
£2,578
(+0.3%)
£2,830
(+3.7%)
Southern Scotland £2,534
(+1.3%)
£2,610
(+1.9%)
£2,760
(+1.6%)
North Wales
and Merseyside
£2,574
(+0.3%)
£2,652
(+1.2%)
£2,838
(+1.9%)
London £2,512
(-0.5%)
£2,591
(+0.4%)
£2,788
(+1.7%)
South East £2,515
(-0.2%)
£2,595
(+0.7%)
£2,777
(+1.5%)
East England £2,505
(+0.2%)
£2,583
(+0.8%)
£2,756
(+1.5%)
East Midlands £2,474
(+0.7%)
£2,556
(+1.5%)
£2,702
(+1.2%)
Midlands £2,512
(+0.5)
£2,585
(+1%)
£2,758
(+1.5%)
South West England £2,524
(-0.2%)
£2,606
(+0.6%)
£2,780
(+1.2%)
South Wales £2,516
(0%)
£2,591
(+0.8%)
£2,771
(+1.4%)

Explaining why there would be a change in January, he said: "We have the energy price guarantee, that has been in place since October and replaced price caps. What that means - and people will find this staggering - is the expensive prices we are paying right now are subsidised by the government."

The energy price cap will rise in January, but most of that rise will be covered by the Government, thanks to the energy price guarantee. It it wasn't for the subsidy, bills would be expected to rise to £4,200 a year.

Mr Lewis continued: "In January the price cap rises even more, it goes up to £4,200 a year but again, all that really means is the subsidy from the government is bigger. But, because of the way the subsidy works it is a discount per pence of the unit rent and because the price cap is recalculated by the regulator each three months and they do slight tweaks by the regions and relationship between direct debit, prepayment and payment in receipt of bills.

"As the price guarantee is just set a discount, what the regulator does on its tweaks will have an impact on the actual prices we pay and recalibrates the regional prices, payment in receipt of bills and prepayment. So there are winners and there are losers and the losers this time are prepayment meter users and prepayment in receipt of bills."

Mr Lewis said he had written to the Department for Business, Energy and Industrial Strategy. He is particularly concerned for many of the nation's poorest.

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