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Money Saving Expert Warns Energy Price Rises Are A "Fiscal Punch In The Face" For Households

Money Saving Expert Warns Energy Price Rises Are A 'Fiscal Punch In The Face' For Households

Martin Lewis has called for further action to help ease financial pressures

4 min read

Personal finance expert Martin Lewis has called for more "political will" to reduce household energy bills, warning that the current measures are "not enough".

Appearing before the Business, Energy and Industrial Strategy Committee on Tuesday, the Money Saving Expert founder insisted that further support is essential to help people with rising energy costs and warned that soaring prices could leave as many as ten million people in fuel poverty.

"On the 1 April people are going to face a fiscal punch in the face when the [price cap] goes up someone on typical use when that goes up to £1,971, that is a £700 rise," he said. 

Chancellor Rishi Sunak announced earlier this year that most households would receive a £150 council tax rebate to help tackle the cost of living, while a further £200 loan would be offered on their Autumn energy bills, to be repaid in installments over the next five years.

But Lewis told MPs the measures were "clearly not enough", particularly when even steeper increases could be seen in Autumn when the energy price cap is set to rise further.

He called for Sunak to annouce further measures to reduce the financial burden on households when he delivers his Spring Statement to parliament on Wednesday, insisting the chancellor needed to go further than a suggested VAT cut, but accepted the detail of how to achieve that was "not my expertise".

"He needs to give them more money. It is really as simple as that," Lewis told MPs today. "One of the things we have got into is this debate on where the money comes from and there is a suggestion of cutting VAT.

"To be honest, that isn't enough. Cutting VAT will help me, I am a wealthy man, I don't need the help, I want it put at the lower end of the schedule.

Lewis noted that "many people" would be unable to afford the £1,300-per-year energy is expected to rise by, "especially with only £350 a year help".

"The prediction in October is a rise to £2,500. What that will mean is many people will see a more than two-fold, getting to three-fold increase in energy bills. Absolute average increase just over a year of just over £1,300," he added. 

He believed that people on lower-to-middle incomes would simply be unable to absorb the rise of more than £1,000 with only £350 proposed support from government. 

"You don't have to be the money saving expert to work out that is not enough."

Lewis called for further government action to reduce costs, but said that tackling the impending cost of living crisis would take "political will".

"The rocket science is not how we fix it, you fix it by making people's bill's cheaper," he added.

"It is having the political will to get that done, and others will have to work out how it's paid for, I'm afraid that is not my expertise."

A cold winter in Europe saw prices rise significantly at the start of the year, with costs hitting record levels earlier this month as sanctions placed on Russian oil and gas exacerbated existing pressures.

Speaking earlier this week, Lewis said he was "virtually out of tools to help people" and worried that ten million people could be plunged into fuel poverty.

"We have a real, absolute poverty issue going to come in the UK, with food banks oversubscribed, and debt crisis agencies do not have any tools," he told the BBC. 

"I need to say, as the Money Saving Expert who's been known for this, I am virtually out of tools to help people now.

"It's not something money management can fix, it's not something that for those on the lowest incomes telling them to cut their belts will work, we need political intervention."

He said that financial issues facing households now were more significant than both the 2008 financial crash and Covid. "This is the worst, where we are right now," Lewis added.

Chancellor Rishi Sunak has insisted he would "stand by" households as he hinted further measures to ease the cost of living could be announced in his fiscal update later this week.

But he admitted it "not going to be easy" for households as they grapple with rising fuel costs and further increases in inflation.

"I know how difficult it is when you are working hard and seeing the price of everything go up every day, every week," Sunak told the BBC on Sunday. 

"The steps we have taken to sanction Russia are not cost-free for us here at home, and I want to be honest with people that it is not going to be easy.

"I wish Government could solve absolutely every problem and that I could fully protect people against the challenges that lie ahead, but I can't do that.

"But what I would say is that I will stand by them in the same way that I have done in the last couple of years.

"Where we can make a difference, of course we will."

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