Martin Lewis warns UK over £108 energy bill charge - '40 per cent of people will will pay more'

Martin Lewis warns UK over £108 energy bill charge - '40 per cent of people will will pay more' Mr Lewis is already predicting a major jump in the January energy price cap Martin Lewis has warned people paying energy bills in the UK that things will get worse before they get better. It comes ahead of what is anticipated to be a sharp increase to the Ofgem energy price cap in January. Experts at Cornwalll Insight have predicted a 16 per cent jump in January, which is also traditionally one of the most energy-intensive months in the year due to cold weather and short daylight hours. However, with no sign of an end to the hostilities between the US, Iran, and Israel, fears remain that it could be even higher than that. There have been some reasons for optimism. Prime Minister Andy Burnham has removed VAT from domestic energy bills, thought to be worth roughly £45 to £50 on the average energy bill. He also confirmed a £100 winter energy payment for approximately 20 million households in England in Council Tax bands A to D. Equivalent funding will be provided to Scotland, Wales, and Northern Ireland. Finally, the Government has announced plans to end the gas standing charge. Fixed network costs will instead be fed into the per-unit usage rate, saving money for those who use less. It is thought roughly 60 per cent of homes will see cheaper bills because of this. When will this happen? However, money-saving expert Mr Lewis warned that it could be some time before we see this take effect. Chancellor of the Exchequer John Healey said it would be in 2027, or as soon as possible after. Mr Lewis said it 'definitely won't be before be before the 1st of October (2027)'. He said: "The gas standing charge, on the price cap anyway, is to be scrapped in 2027. What does 2027 mean? Well, as it's part of the price cap, it definitely won't be before be before the 1st of October. My sneaking suspicion is they'll end up doing it on the 1st of January 2028, so the last day of the price cap will be in 2020 - the last day of standing charges will be in 2027. It's not going to happen quickly. "It's currently £108 a year on direct debit and prepay. The cost is going to be moved to the unit rate, so this isn't about saving money in totality. This is about a structural change and I've we've always argued that - for fairness - so that those low users who struggle at the moment to cut their bills because so much of it is about the standing charge, and I get so many messages about this, that won't happen anymore. "Now, the the current gas unit rate is about 8p per kilowatt-hour. My very, very rough, back-of-the-envelope - it may not be like this because we don't know what the prices will be - guess is that £108 a year disappearing will add about 0.8 to 0.9p per kilowatt-hour on top. So it's going to be somewhere in that ballpark just to give you an idea, but it's very, very rough. "What does it mean? Lower users will pay less, higher users will pay more. And actually, because there are quite a lot a low number of very high users and it's done on the mean average, it actually works out 60 per cent of people will pay less, 40 per cent of people will will pay more." What does the Government say? A statement on the Government website said: "Tens of millions of households will no longer pay standing charges on their gas bills as the Government gives families more control over what they pay and some more breathing space. "A standing charge is a fixed daily fee added on top of a household gas bill, regardless of how much gas has been used. A household could use no gas at all but still must pay the standing charge. The Chancellor will announce an end to this unfair and outdated practice. He will ask Ofgem to deliver removal of these charges – which are £108 a year for the typical household on average – in 2027 or as soon as possible after. "Instead, these fixed costs will be paid on the unit rate, which could save 60% of account-holding households around an average of £45 off their annual bill." The price cap The current price cap, which is the maximum amount energy suppliers can charge people on default tariffs for each unit of energy and the daily standing charge, is £1,723 a year. It is important to note that it is only the rates that are capped, so bills can be higher if you use more. That represented a jump of 3.6 per cent from the previous three months. As mentioned earlier, a big jump is anticipated in January. Cornwall Insight says: "The price cap is expected to rise by 16% compared to October, reaching £1,999 a year for a typical dual-fuel household¹ in January 2027, an increase of £276 and the largest rise since January 2023." It adds: "This substantial increase is largely driven by the escalating conflict in the Middle East, which continues to disrupt gas supplies to the UK and the rest of the world. The knock-on effects have seen EU gas storage stocks at their lowest September levels in 15 years. "Ofgem sets the wholesale part of the cap using prices from a fixed period known as the observation window. With that window for the January cap now nearly halfway through, the price rises seen in September are already locked in, making a January increase all but certain." Ensure our latest DWP headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings