Regulator Ofgem has revealed that the price cap, which is supposed to protect consumers from unfair increases in their energy bill, will rise to £3,549 a year for the average household – more than three times last winter’s level After the new price cap was announced on Friday, the founder of Money Saving Expert said people would die if the government did not step in with adequate support measures. “More help for the poorest is desperately needed or people will die this winter because of the unaffordability of the 80 per cent increase in energy prices so far,” Mr Lewis said. Providing more support advice to worried households following the announcement, Mr Lewis hosted a Q&A on YouTube where he advised households not to switch payment methods as direct charges are based on usage estimates. Mr Lewis said families looking to change their payment plans could be more affected in the long run. A MoneySavingExpert.com reader asked if she should cancel direct debit and switch to paying her bill on receipt to better control her finances. He responded by saying, “You will have a short-term cash flow gain from switching to bill receipt payment. “However, in the long run, because you’re paying more for each unit of energy you use, you’re going to pay more to receive bills. “Because if you overpay on a fixed charge, you’re entitled to that money back.” At current market prices, the cap would exceed £5,500 a year by January and £7,000 by April, as analysts warned gas costs could rise further as Russia further squeezes vital supplies on which European countries rely. This would deepen the problems faced by millions of low-income families who already struggle to afford adequate heating and electricity in the colder months. Nadhim Zahawi said people on £45,000 would need help with their energy bills (PA) Even at the level of the October cap, the poorest households will see their incomes “disappear”, the Joseph Rowntree Foundation (JRF) said. The charity has estimated that the average low-income family will have to pay four-and-a-half times more for energy in 2023-24 than last year, with single parents handing over almost two-thirds of their income after housing costs. Energy bills for low-income adults will exceed 120 percent of their income. Middle-income families will see almost a fifth of their earnings go to gas and electricity, prompting fears that businesses will collapse as people tighten their belts and spend less on non-essentials. Chancellor Nadhim Zahawi said people on £45,000 would need help. He said the Treasury was exploring “all options” to help households, adding that the country was in a “national economic emergency [that] it could go on for 18 months, two years.”
