'Financial pit of doom' looms in winter as Martin Lewis warns support is needed now

'Please, no one think that you can’t have a bill bigger than £3,500 in October': Martin Lewis breaks down what the price cap really means

Money saving expert Martin Lewis warned of a “financial pit of doom” this winter as the energy price cap rises by 80% from October – with another significant spike forecast in January.

A typical household can expect to pay £3,549 from October 1, although this is not necessarily the maximum as higher or lower usage can put people above or below that figure.

Energy regulator Ofgem has already called on the incoming prime minister to “act further” to support billpayers and Mr Lewis said they need to understand the scale of the “absolute catastrophe.”

“We are facing a financial pit of doom this winter,” he told ITV News. “First of all, when those numbers are given of the price cap – there is no absolute maximum on what you pay for energy bills.

“That is just an example of what the cap would be for someone on typical use. What is actually capped is the standing charge in the unit rate.

“So, please, no one think that you can’t have a bill bigger than £3,500 in October, you can have a £10,000 bill if you use more.”

Rishi Sunak, the former chancellor, announced a £15 billion support package for consumers in May, including a £400 discount for every household on their energy bills.

But Mr Lewis has warned that support does not “touch the sides”, as it was announced in May when the price cap was not expect to soar as high.

May support 'not enough'

“Listening to what was announced in May, there is a big difference that has not been factored in to what was announced in May and where we are now,” he said.

“In May, the price cap was predicted for someone on typical use to be going to £2,800, roughly a 40% rise, but that was then meant to last until April.

“Ofgem has since shortened the price cap so we have three-monthly price caps [a review of the price cap every three months], so we’ve seen a price cap rise of 80% coming up in October.

“And the next prediction in January is another 51% rise, taking a typical bill to £5,380.

“So, if you actually look across the six-month period that the May [package] was meant to help when it was £2,800, it’s actually £4,400 - which means the help that was announced before is not touching the sides.

“Unless on the day the new prime minister gets into office we hear substantial help – and the mechanism doesn’t matter, just more money needs to be given to people on benefits, people on pensions and lower and middle income workers – then we will see physical and health risks that will manifest and people will die this winter.”

'We are facing a financial pit of doom this winter'

Without an end to the war in Ukraine and without a global recession, Mr Lewis said it is unlikely we will see a drop in the price cap in the foreseeable future.

'Irresponsible government'

He criticised the government as “irresponsible” for not having support measures in place ahead of Friday’s announcement.

“I think on September 5 [when the new prime minister is announced] and hopefully no later we need to hear a full package,” he said.

“I beg, I plead and I pray she will understand the scale, or he will understand the scale, of this absolute catastrophe that we face for people’s bills.

“But, if not, lives and people’s physical and mental health are at risk this winter.”

So, what does the government say?

Chancellor Nadhim Zahawi said the increase in the energy price cap would cause “stress and anxiety” for people, but that the government was working “flat out” to develop more options to support households.

“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support,” he said.

“This will mean the incoming prime minister can hit the ground running and deliver support to those who need it most, as soon as possible.”

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