Martin Lewis has written a letter imploring the government to act against a large rise in energy prices that is set to hit households later this year.
The MoneySavingExpert founder is clearly very concerned about the proposed 20 percent increase in energy bills that is set to come into effect this April.
That’s not too far away, is it?
So, the financial watchdog has written the Jeremy Hunt – the Chancellor of the Exchequer – to ask him to intervene and ‘urgently consider’ getting rid of the price hike, which Lewis called a ‘disproportionate decision’ that might be crippling for those on lower incomes who are already taking the brunt of the cost-of-living crisis.
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In his letter, he suggests that the additional rise – prices are really high as things stand – could stick another 1.7 million households into fuel poverty territory.
There are already an estimated 6.7 million households in that precarious position as it stands, and that number would swell to a staggering 8.4 million if the price rise goes ahead.
Lewis called that statistic ‘frightening’ and it’s hard to disagree with him.
He shared an update with his 2.1 million Twitter followers yesterday, explaining: "I have just sent the Chancellor @Jeremy_Hunt - supported by major charities - a letter asking him to postpone the government's 20% increase in energy bills on 1 April.”
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In that letter, he references the Chancellor’s statement in November last year in which he announced a 20 percent increase to the ‘Energy Price Guarantee’ – the state subsidised energy rate – starting this April.
That means that energy prices will rise significantly for nearly everyone in England, Scotland, and Wales – Northern Ireland has a different plan – right when the £400 support scheme for energy bills comes to an end.
His letter states: "In your November Autumn Statement you announced a 20% increase of the energy price guarantee (EPG) - the state-subsidised energy rate - from April.
“This will increase energy bills yet again for almost every home across England, Scotland and Wales.
“This comes at the same time that the £400 energy bills support scheme comes to an end.
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"Yet things have changed since then, and I would ask you to urgently consider postponing that increase.
“This cannot wait until the Budget - in practice, energy firms will need to know much sooner if the planned rise isn't happening on 1 April, or they are bound to have to communicate to customers that it is coming."
He added: “This decision to increase prices was made at a time when wholesale rates were looking to be far higher than they are now.
“In fact, on current predictions the EPG subsidy may well only be needed from April to July. “After that, the underlying price cap currently looks like it may be cheaper than even the current EPG rate of £2,500 a year for a typical household.
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"This means the provisioned Government expenditure on the energy subsidy will be billions less than expected when the plans were made, giving significant headroom to enable a postponement.
“Plus, maintaining a lower EPG will also help reduce inflation."
"While the EPG isn't perfect, as it's not targeted, it is the method the Government currently uses to support people.
“Postponing the increase is a practical and fair decision, with household energy bills already double what they were the prior winter.
“Crucially, the damage to people's pockets and mental health of another round of energy price rise letters is disproportionate."
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Referencing those fuel poverty statistics, he continued: "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 households in this position in October 2021.
“That is a frightening statistic.
"There is widespread support for this move, which the likes of Citizens Advice, Fair By Design, National Energy Action, and StepChange agree with.
“I trust you'll consider this change and I look forward to receiving your response."
Topics: UK News, Money, Martin Lewis, Politics
Tom Wood