A personal finance expert has warned households not to become "complacent" after Andy Burnham announced plans to remove VAT from electricity bills, urging families to continue budgeting carefully even if costs fall.
The VAT cut is expected to save the average household around £45 a year from October. While the change has been welcomed as a boost for consumers, experts say the savings are unlikely to solve wider cost-of-living pressures on their own.
Expert urges caution
Joe Lytwyn, a personal finance expert at thimbl.com, said any reduction in essential household bills would be good news for families after years of rising living costs.
"Any reduction in the cost of essential household bills is likely to be welcomed by families, particularly after several years of higher living costs," he said.
"While a saving of around £45 a year won't transform household finances on its own, it could still ease some of the pressure, especially for those already carefully managing their monthly budget."
Mr Lytwyn added that small savings across multiple areas can add up over time, and measures that reduce unavoidable household costs could play a useful role in improving financial resilience.
Long-term planning advised
However, Mr Lytwyn warned households not to rely solely on government support or assume lower bills will last.
"Government support can certainly help, but it's still important for households to stay proactive with their finances," he said.
"Reviewing monthly spending, reducing unnecessary energy use where possible and keeping track of household bills can all make a positive difference over the longer term."
He added: "People should also avoid becoming complacent if bills fall slightly, as future energy prices and wider living costs remain uncertain."
With energy demand typically rising during the colder months, Mr Lytwyn said the timing of the VAT cut could provide some welcome relief but should not replace long-term financial planning.
