Money Saving Expert Martin Lewis has warned that energy bills could rise by another £517 in January, but it all hinges on what happens in the Middle East. Tomorrow, October 1, Ofgem raises its price cap by another 4%, pushing typical bills up to an average of £1,723 a year for a dual fuel household.
January rise could hit 30%
Things are set to get a lot worse in January, the financial expert told ITV’s GMB this morning (Wednesday, September 30). Martin warned that on current predictions, energy bills are set to rise by around 21% in January, which would add £361.83 to the average bill. But the rise could be as high as 30%, Martin warned, which would equal £516.90 extra on bills.
Martin explained: “Everyone who watched my show a couple of weeks ago will know I was saying 24%, I’m now saying 21%, Cornwall is one of the analysts, I do a sort of combination of three different analysts and they’re at 21%. No-one knows.”
Impact of tomorrow's price cap rise
Martin added: “We’ve got a 3.6% rise coming tomorrow. Now actually if you dissect that, if you are electricity only, your electric unit is going up less than 1% and your standing charge is coming down. Tomorrow won’t be that big for you.
“If you’re a heavy gas user your gas is unit rate is going up 9%. So tomorrow’s rise hits people who pay on gas.
Wholesale rates locked in
“The January rise. The thing to understand is, the January price cap is based on a 13-week assessment period and the changeable factor is wholesale rates. They have been sky high, we are six weeks through the 13 weeks. That sky high wholesale rate, they’re baked in, they’re locked in. For it not to rise we’d need an enormous, catastrophic plummet in wholesale prices, I mean it would be a good plummet. It would have to be a catastrophic cause.
“It is almost impossible that the January price cap will not be a rise. It is highly improbably it will not be a very substantial rise. I would suggest we should be thinking in the realms of 12 to 30% depending on what happens in the remaining period of seven weeks. If we were to have de-escalation in the Middle East, it will be nearer 10, 12, 15%, if that were to get worse, it could be higher than it is right now.”
Asked what people should do to get bills down, Martin added: “Use less. That’s not what the government wants me to tell you.”
