Households are facing a “fiscal punch in the face” when the energy price cap rises next month, Martin Lewis has warned MPs.
The Money Saving Expert, who is a consumer champion, gave the stark assessment ahead of Chancellor Rishi Sunak’s spring statement tomorrow and an expected huge rise in energy bills next month.
He told MPs: “About a year ago for somebody on typical use, and of course if you use more your bills are higher and if you use less your bills are lower, you would have been paying £800 on the cheapest fix.
“Right now there’s nothing cheaper than the price cap currently, which for somebody with typical use is £1,277.
“On April 1, people are going to feel a fiscal punch in the face when that goes up for someone on typical use to £1,971 that’s a £700 rise.”
Earlier in the week Lewis, who is famous for giving financial tips and tricks to the public, said he had “run out of tools” to advise the public and called on Sunak to take action.
He told MPs on the Business, Energy and Industrial Strategy Committee that there was “very little” the government could do to mitigate bill increases of £1,300 next year except for more financial support.
Households are to get up to £350 in cash to help with their energy bills this year, as part of a package announced by the Chancellor Rishi Sunak.
But with bills expected rise again in October Lewis said the government’s £350 offer is “not enough”.
He added: “It is worth remembering energy bills tend to be regressive. The difference in what the very highest users pay, the very richest pay, compared to what the poorest pay isn’t that big. It’s pretty flat. It’s almost a poll tax.
“For those people on lower to middle incomes, a £350 worth of help of which £200 is questionable to cover a £1,300 rise. Well you don’t need to be the money saving expert to work out - no that is not enough.”
Lewis also warned about “worrying issues” of energy companies increasing customers’ direct debits disproportionately to the price cap increase, even for those in credit.
He told MPs : “There is no reason to double someone’s direct debit when they’re in credit and the price cap is going up 54 per cent.
“That’s not mathematically sound and it’s a breach of licence conditions."
“I have been very concerned that a number of companies are doing it to improve their cash-flow situation at the expense of their customers, and I would like to see the regulator crack down on that quite substantially.”
He added: “It’s important to remember that there is no competition in the market any more. This is not a market… no one can switch.”
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