MARTIN Lewis has issued an update on whether he thinks energy bills will rise in April.
Speaking on BBC Radio Four’s Today programme this morning, he said there’s a “better than 50% chance” of bills NOT rising to £3,000 in April.
AlamyMartin Lewis says he thinks energy bills will not rise to £3,000 in April[/caption]
The Energy Price Guarantee, which is currently set at £2,500, is set to rise by £500 in April.
It determines how much the average household pays for energy bills.
But consumer champion Martin Lewis has said there’s an 85% chance the government will extend the help, so that the cap remains at £2,500 in April.
Chancellor Jeremy Hunt previously said this will not happen.
Speaking on the radio this morning, Mr Lewis said: “I wouldn’t say it’s a done deal. I was saying in the office I think it’s a better than 50% chance.”
Other reports have suggested that energy firms are already preparing to amend bills, as they expect the support to continue.
It’s understood the support will continue for an extra three months, until wholesale prices have fallen, The Times reports.
What is happening to energy bills?
At the moment, household bills are protected by the energy price guarantee which is £2,500 a year on average.
In April it is due to rise to £3,000.
Households have also been benefiting from a £400 energy rebate, which has been applied to energy bills in six instalments.
The last payment is being made this month, meaning bills will rise by £67 a month at the same time as the energy price guarantee goes up.
He said a price cap rise by July is “unlikely to have any impact on us” until the next again April.
The price cap was introduced in January 2019 and is way to make sure households don’t get ripped off by their energy suppliers.
It used to be that twice a year Ofgem set the maximum price that households on their supplier’s default tariff would have to pay for every unit of gas and electricity they used for the next six months.
But the energy regulator announced a major shake-up last August, stating that the price cap would change every three months.
It affects roughly 22million people on default or standard tariffs offered by the country’s energy providers, according to Ofgem estimations.
The cap is calculated based on the wholesale price of gas and electricity and also includes allowances for tax, charges paid to the energy networks, green levies and social payments.
The Energy Price Guarantee (EPG) is simply a price freeze on bills rolled out by the government to help struggling households.
It sees the Government limit the price suppliers can charge customers for units of gas, and replaced the price cap set by regulator Ofgem.
It applies to customers on standard variable tariffs.
Speaking about the letter to extend the EPG and postpone the price cap rise, Mr Lewis continued: “It’s saying don’t do this – it’s not good for individuals to put prices up, it’s not good for people’s mental health, it’s not good for consumer confidence which means it’s bad for business.
“It would also keep the inflation rate down if we don’t put prices up.
“It’s a bit of a no brainer.”
The number of households struggling to afford their bills could rise from 6.7million to 8.4m as a result of the April rise, according to fuel poverty campaigners.
However, the money saving expert said some energy firms are planning to keep current rates into April.
He said: “I’m hearing they have not been told that the rate is staying. They have been told that there is an attempt to keep the rate at £2,500.
“So we’re not at the smoking gun stage that this is definitely happening, but I would say we’re at an 85% likelihood that the price won’t be going up.”
He added: “If there’s no U-turn, you’ll pay 20% more than you do now. If there is a U-turn, you’ll pay exactly the same as you do now.”
What help is available?
Millions are currently receiving a £400 energy rebate in six instalments starting from October last year, but the final payment worth £67 will be made this month.
At the moment all households with a domestic electricity meter or direct relationship with their provider receive the discount.
Martin Lewis’ MoneySavingExpert.com has unveiled a new calculator that can give you an estimation of what your bills might go up to from next month.
The Alternative Fuel Payment is another way struggling households can get help.
People on a direct debit should have had the cash into their account and those paying by standard credit should have had £200 added to their energy account.
Customers on prepayment meters should have had a voucher for the money by text, email or post.
Around 900,000 households can apply, including people who live in houseboats or have a communal electricity supply.
The government’s online portal is now open.
Millions of households started receiving a £400 energy bill discount from October 1.
Households will have already received a £66 and £67 payment every month.
There will also be a payment worth £67 in March.
And don’t forget between November 2022 and March 2023, a £300 one-off “Pensioner Cost of Living Payment” is being paid out to eight million households.
It is being given to those who already get the winter fuel payment – which is worth between £100 and £300 for those over state pension age.
There are also loads of schemes your energy supplier could provide, with some granting as much as £1,500.
British Gas, E.ON, Octopus and Ovo all offer grants worth hundreds of pounds.
But don’t worry if you don’t know who your supplier is – you can use Ofgem’s supplier search tool on its website.
Alternatively, just ask your supplier directly what funding is available.
We also did a roundup of energy suppliers offering free credit to hard-up households – read our guide here.