Money saving expert Martin Lewis is calling on the government to scrap a planned rise in the energy price guarantee, saying it is no longer necessary because of the sharp drop in wholesale prices.
He called the action, which will raise an average household’s annual energy bill from £2,500 to £3,000 a “national act of harm” that would bring another 1.7million people into fuel poverty.
“It just seems to me there is no need to do this,” he told BBC Radio 4 on Thursday.
“If we postpone this rise it is likely from July, wholesale prices will have gotten to the price cap and if the energy price cap which is set by the regulator and is dictated by wholesale prices, is lower than the energy price guarantee we pay the lower amount, and that is likely to happen from July.
“To put this national act of harm of increasing the price guarantee for just three months, to throw another 1.7million people into fuel poverty taking it to 8.4 million, it seems unnecessary.”
Wholesale gas prices initially soared worldwide in the wake of Russia’s invasion of Ukraine a year ago.
But they have since come down substantially, due in part thanks to a relatively mild winter in the UK and across the rest of Europe.
Mr Lewis has sent a letter calling on the government to abandon the plan, which has the backing of major charities including Citizens Advice, National Energy Action and StepChange.
Households across the UK are set to receive a letter soon telling them their energy prices are set to rise 20 per cent from April.
“That’s damaging to people’s pockets. And it’s also damaging to people’s mental health, yet another major bill going up when the nation is already shivering with the damage of the cost of living crisis. And it just seems to me there is no need to do this,” he said.
“I would ask the chancellor to postpone this rise.”
He said because of the fall in energy prices, it is likely the cost will fall below the current price cap set by the regulator in July.
And if the energy price cap is set by the regulator is lower than the energy price guarantee, households will pay the lower amount.
“I said postpone the rise, because the likelihood, and nothing is certain, but the likelihood is if we postpone the rise in April, from July onwards the Energy Price Guarantee exist anymore because the price cap will be lower.
“That’s what all the current predictions are.”
He said the Chancellor must take action soon to allow companies to prepare.
“I accept this will cost the government money compared to not doing this.
“But we have a nation that is teetering. We have strikes across the place with people not being able to afford the cost of living rises.”