Money Saving Expert Martin Lewis has warned that bills are set to rise this April - costing 15m households up to £100 more.
Money Saving Expert Martin Lewis has warned households that their energy bills are set to rise by up to £100 from April.
Martin issued the warning to viewers of his ITV1 show the Martin Lewis Money Show, that a big increase in energy bills is on its way.
He warned that a new ‘substantial’ gas and electricity price cap is expected to be announced on February 5 and explained, “The main cap is for those on standard tariffs paying by direct debit – that is over half of you.
“In fact, it’s a rate cap not a price cap, in reality. There is no one price you should pay more than. The more you use, the higher your cap – the less you use, the less it is.”
“The current rate is £1,042 per year for somebody with typical usage. And most big companies will allow this.
He added, “My prediction is that this will rise by £70 to £90 a year. The new cap starts on April 1 and lasts six months.”
But if you’re wondering how to save money, he warned that customers shouldn’t do anything just yet.
“Your supplier will remain the same for now, and, in a few weeks, Ofgem, the energy regulator, will automatically move you to a new company with a replacement tariff,” he said.
Meanwhile, Ofgem has said that its price cap could rise by £96 to £1,138 from April 1 for around 11 million households on their supplier’s default tariff. And a further four million households with pre-payment meters could see their bills jump by £87 to £1,156.
It comes after the energy regulator said suppliers could pass on the cost of rising gas and electricity prices to customers.
Ofgem chief executive Jonathan Brearley said, ‘Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic. We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.’
Ofgem reviews and changes the price cap once every six months.
Speaking to the BBC on Friday morning, Mr Brearley argued that it would be better to make a change now when the country is heading into the summer, a time when energy usage is lower than in October, ahead of winter.