Martin Lewis has urged Chancellor Jeremy Hunt to reconsider a plan to end the £400 energy bills support scheme, as it coincides with a 20 percent increase to the energy price guarantee (EPG). The support, which has offered roughly £67 per month to households across the country, is set to end in April, as energy bills will rise once again.
However, the founder of Money Saving Expert, has asked Mr Hunt to “urgently consider postponing that increase”.
He argued the economic climate has changed since the decision was first announced, and this should change the Government’s outlook on the matter.
In a letter to Mr Hunt, Mr Lewis explained: “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.
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He said further increases could not only damage finances, but also the mental health of worried households right across the country.
The expert warned many people are already “fuel poor” – that is, unable to afford to heat their home to an adequate temperature.
Without intervention, he said, this could worsen in the months to follow as energy bills are expected to rise.
The National Energy Action charity predicts the number of households in fuel poverty will rise from 6.7 million to 8.4 million from April.
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Mr Lewis added: “That is a frightening statistic.”
In October 2022, Mr Hunt said key changes to the Energy Price Guarantee would come into force.
From April 2023, the support will be more focused on “those most in need”, the Chancellor said.
He explained: “But beyond that [April], the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.
“So I’m announcing a Treasury-led review into how we support energy bills beyond April.
“The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.”
Recently, Deutsche Bank analysts stated maintaining a £2,500 price cap from April would only cost the Government an extra £4.5billion.
This is because gas prices are falling quickly, and as Mr Lewis highlights, the subsidy is not likely to be required by energy firms beyond July.