MSE founder to fund £100,000 advice service for vulnerable energy customers

MoneySavingExpert founder Martin Lewis is to fund a new £100,000 advice service for vulnerable energy customers, warning bills will rise by 51% on April 1 “unless the Government intervenes”.

Mr Lewis said the money would go to fuel poverty charity National Energy Action (NEA) to “free up its helplines” by April 1, when expected increases to the Government’s energy price cap will come into effect on consumers’ bills.

In a tweet, Mr Lewis wrote that April 1 would see energy bills rise by 51% unless the Government intervened, adding: “Now pls Govt provide more help for em to advise on. We can’t let people choose freeze or starve!”

His funding announcement follows his warning last week that households could expect to take a “seismic” hit to their energy bills which could force some to decide whether to heat their homes or eat.

NEA also warned last month that average domestic dual fuel energy bills, which have already soared by more than £230 per customer compared with last winter, could increase by a further £550 a year.

NEA said the average household gas bill could increase by £467 compared with October last year, meaning the cost of heating the average home will have doubled since last winter.

Energy prices have spiked globally due to a series of issues aligning around the world. Increased demand from a reopening economy has been paired with higher demand from China, and a summer that was less windy than normal.

The price cap is currently set so low that energy suppliers are having to pay more for the gas they buy than the amount they can sell it for.

A poll by NEA found six out of 10 British adults say they would reduce their heating use by a fair amount or a great deal if the cost of heating doubles.

Some 85% of UK residential buildings, or 23 million homes, are still currently connected to the gas grid, using a boiler and central heating system.

According to Cornwall Insights, an energy sector specialist, bills could rise from £1,277 a year under the current price cap to £1,865 a year when the next revision is announced, a rise of 46%.

They also predict it could spike to £2,240 a year at the following quarterly revaluation in August 2022 without a significant fall in energy prices globally.

Several firms went bust in 2021, with customers at other energy firms picking up the tab for the collapses, whilst the Government also took over the running of Bulb after it failed last November.

Ofgem has subsequently announced changes to how much other energy firms, and eventually customers, can be forced to pay to fund rivals’ collapses.

However, many in the industry say more needs to be done to avoid future companies from going bust and stricter rules put in place over who can run suppliers.