This is why Martin Lewis is pleading for April's energy bill hike to be postponed

We're all dreading another energy price increase, but there's a very good reason Martin Lewis is pleading with the government to postpone the planned hike

Martin Lewis Money Saving Expert
(Image credit: Getty Images)

Families across the country are facing a 20% increase in their energy bills in April. But money saving expert Martin Lewis is calling on the government to postpone the planned increase, as fears grow that it will send more people into fuel poverty, where they can't afford their bills. 

For most of 2022 and well into 2023, households have been worried about how much their energy bills will cost after huge increases in the price of gas and electricity. In April 2022, energy prices went up by 54% and they were due to rise again in October 2022. But the government stepped in and introduced the Energy Price Guarantee. This sets a limit on the price people pay per unit of gas and electricity they use, and is less than the price your energy supplier pays for the gas and electricity they buy from the wholesaler. The government has been making up the difference in price.

But when the Price Guarantee was introduced, it was meant to keep average annual energy bills, based on typical use, at £2,500 for two years. But as energy prices were still going up, the Chancellor of the Exchequer Jeremy Hunt said in his Autumn Statement that the average bills under the Price Guarantee would rise to £3,000 for 12 months from April 2023. This is a 20% increase and a bitter blow for families already struggling to pay their energy bills. It is also slated to come into force just as the £400 energy rebate ends. 

Martin's latest plea comes after her urged families to make a simple check to avoid another price hike, and to avoid doing laundry at specific times to avoid the change of blackouts.

Why does Martin Lewis want the Energy Price Guarantee increase to be postponed?

Martin Lewis has sent a letter to Chancellor Jeremy Hunt asking his to postpone the increase to the Energy Price Guarantee. He is worried, not only about the devastating impact this increase could have on people's mental health, but also their bank accounts. 

In his letter, Martin Lewis writes: "Without intervention, and soon, the charity National Energy Action predicts that the number of fuel poor households will rise drastically from an already shocking 6.7 million to 8.4 million from April – approaching double the 4.5 million in this position in October 2021. That is a frightening statistic."

But Martin also points out that the plan to raise the Energy Price Guarantee to £3,000 was made when wholesale energy prices were predicted to be much higher than they are now. 

Predictions suggest that by the summer, energy prices might even be lower than the Price Guarantee's rate of £2,500 and the scheme may no longer be needed, and the government may no longer need to make up the difference in the price that families pay their suppliers, and the price the suppliers pay to the wholesalers. 

Currently, the energy price cap, is set at £4,279 a year (an average based on typical use). But the Energy Price Guarantee lowers this to £2,500 and the government pays the difference. 

But analysts at Cornwall Insight, who provide regular predictions as to how the energy price cap will change, predict that by July, the energy price cap will fall to £2,360. This is £140 less than the current level of the Energy Price Guarantee, and £640 less than the £3,000 Energy Price Guarantee level that is due to come into force from April 2023.

If those predictions are accurate, then Martin says the planned hike should be postponed. And he's urging the government to act before the Spring Budget to give energy suppliers time to plan and inform customers of any upcoming changes. 

What can you do to keep your energy bills as low as they can be?

Whether the government postpones the planned increase to the Price Guarantee or not, we're currently paying more for the energy we use than ever before. But there are ways to make sure you're keeping your bills as low as possible.

  • Try to reduce how much energy you use at home - turn your thermostat down, keep doors and windows closed, and avoid energy hungry appliances like tumble dryers
  • Request a smart meter, or submit meter readings to your supplier if you don't have one, to ensure you're getting accurate bills and only paying for energy you use
  • Check that you have been receiving the £400 energy rebate and, if you're on a prepayment meter, that you've redeemed your vouchers. According to the latest data, £50m worth of vouchers haven't yet been redeemed.
  • Speak to your supplier if you are struggling to pay your bills - you may qualify for grants or assistance.
Sarah Handley
Consumer Writer & Money Editor, GoodtoKnow

Sarah is GoodtoKnow’s Consumer Writer & Money Editor and is passionate about helping mums save money wherever they can - whether that's spending wisely on toys and kidswear or keeping on top of the latest news around childcare costs, child benefit, the motherhood penalty. A writer, journalist and editor with more than 15 years' experience, Sarah is all about the latest toy trends and is always on the look out for toys for her nephew or Goddaughters so that she remains one of their favourite grown ups. When not writing about money or best buys, Sarah can be found hanging out with her rockstar dog Pepsi, getting opinionated about a movie or learning British Sign Language.