Martin Lewis shares ‘bleak’ outlook as energy bills to rise in October
Martin Lewis has shared how much households face paying for energy later this year as the cost of living crisis deepens.
The money-saving expert described the bleak outlook as “horrendous” as millions are already struggling to pay their bills since energy prices soared in April.
What is the latest price cap prediction?
Latest predictions from analysts at Cornwall Insight suggest the price cap could rise to £3,244 from October - up from the £3,003 figure estimated just two weeks ago.
It is then predicted the price cap could rise again to £3,363 from January.
The price cap sets a limit on the rates a supplier can charge for each unit of gas and electricity you use. It is currently set at £1,971 and covers 22 million households.
Martin Lewis described the bleak outlook for the coming months as “horrendous”.
Writing on Twitter, he said: “I feel sick writing this!
“I’ve just got the latest price cap predictions from @CornwallInsight. A huge spike in the key year-ahead wholesale price means OCT cap prediction UP 64% (so £3,244/yr on typical bills) JAN cap prediction UP 4% (so £3,363/yr).
“It’s horrendous. Especially as we’re now near the end of the assessment period that sets Oct’s cap, so this is the right ballpark.”
He added: “The Oct prediction is now £450/yr HIGHER than Ofgem mooted in May & that was what Sunak based the £400-£1,200/yr help on. More will be needed!
“Please share - people need to know what’s coming to see if they can prepare for it.”
Mr Lewis explained that the planned increases means families currently paying £100 a month for energy will be set back £165 from October and £170 from January.
Those paying out £150 will see it increase to £250 and £255 by the new year, and people already paying £200 a month face prices of £330 and £340.
Families currently paying £300 will have to find £495 by October and £510 from January.
He added: “I’m sorry.”
Why is the price cap set to rise?
Cornwall Insight said the reason for its higher price cap estimation is down to “uncertainty regarding Russian gas flows into continental Europe”, as well as the halted strike by Norwegian gas workers.
Dr Craig Lowrey, principal consultant at Cornwall Insight, previously said: "There is always some hope the market will stabilise and retreat in time for the setting of the January [price] cap.
“However, with the announcement of the October cap only a month away, the high wholesale prices are already being baked into the figure, with little hope of relief from the predicted high energy bills."
When do cost of living payments begin?
The first cost of living payments will start to hit accounts from this week.
The first half of the £650 payment - worth £326 - will be given to those who claim Universal Credit, income-related Employment and Support Allowance, income-based Jobseeker’s Allowance, Income Support, and Pension Credit from 14 July.
The second payment - worth £324 - will then arrive to these eligible households in the autumn, although no set date has been announced.