Martin Lewis issues bleak price cap update as he calls for the ‘zombie’ Government to ‘wake up’
The next energy price cap will be announced on 26 August and will come into effect in October, with prices expected to skyrocket
Consultants at independent data analyst firm Cornwall Insight said bills are on course to increase more than initially forecast.
Lewis has warned that based on Ofgem’s new methodology, there will be an 81 percent price cap rise in October, which would increase a typical bill to just over £3,500 per year.
He also said that a further rise of 19 percent would occur in January, which would see bills surpass £4,000 a year.
The government recently announced that there would be a £400 energy bills discount to support households this winter, something that Lewis said would be swallowed up instantly, leaving many ‘destitute’.
He took to his official Twitter account on Tuesday morning to share a detailed thread regarding the increase, and told the government it needs to “wake up soon”.
He said: “Tragic news. The latest Cornwall insight prediction, based on Ofgem’s new methodology, is an 81% price cap rise in October (taking typical bill to £3,582/yr) and a further 19 percent in Jan (so £4,266/yr).
“Action and planning is needed now. The zombie government needs to wake up sooner than 5 September.”
He continued: “These amounts are unaffordable for millions. The January figures equates to 45 percent of the new full state pension, and a higher proportion of the old one.
“The rise alone on the January prediction, from when the help was first announced in May is roughly £1,400/yr.
“That rise alone swallows up not just £400 help for all homes, but even the £1,200 for the poorest. This will leave many destitute.”
Lewis has been vocal about the cost of living crisis that has seen millions of households now under significant financial strain.
The hospitality sector has also hit out, claiming that the cost of living crisis has been worse for the industry than the Covid-19 pandemic, which essentially shut the sector down for months.
This comes just a day after the 50-year-old, who has 1.6 million Twitter followers, called for the end of post-Brexit EU roaming ‘“rip-offs” by mobile operators.
How does the price cap work?
Ofgem, the The Office of Gas and Electricity Markets states on the official website that the price cap “limits the rates a supplier can charge for their default tariffs”.
The most recent energy price cap level was announced by Ofgem in February 2022, and came into effect on 1 April.
The energy price cap is quite new, and was first introduced by Ofgem in 2019, and it sets the maximum amount that energy suppliers can charge per kWh of gas and electricity (the unit rate) each year.