Martin Lewis is right: the cost of living emergency is already here
For a man on vacation with his family, Martin Lewis looked and sounded anything but relaxed.
The founder of Money Saving Expert (and the closest Britain has come to a patron saint of personal finance) usually sticks to a self-imposed media embargo for two weeks each summer, but broke it after shocking predictions that the average energy bill could be over £5,000 in the UK next year.
Stare through the barrel of the camera, Lewis warned that this was a “national crisis on the scale of the pandemic”, and urged the British “zombie government” to wake up and increase state aid now or risk “millions destitute and in danger this winter”.
Lewis cares. Why? Because he can foresee exactly how bad this can get.
A lightning rod for the tens of millions of consumers who subscribe to and follow his weekly money-saving email social mediaLewis has a deep understanding of the country’s financial condition. Politicians should ignore this at their peril.
When energy regulator Ofgem announces the October price cap on August 26, it will be open season for energy companies to require customers to pay even higher direct debits. For many, the monthly energy bill is higher than their mortgage or rent.
Ofgem says the recent upward adjustments to the price cap will prevent more energy companies from going bankrupt. But what about people who go bankrupt? Lewis grimly predicts civil unrest.
There is a wave of support for the Don’t Pay campaign. Supporters plan to cancel energy payments in protest (this will ruin their credit scores, but campaigners see no viable alternative).
I’m a regular expert on LBC Radio with Eddie Mair. Callers we speak to cannot understand the continuing ignorance of the Westminster bubble about the financial ruin that people and small businesses are now facing.
In the beginning, it was people with delivery jobs who were priced out of work due to the rise in petrol and diesel. Others talked about giving up jobs they were passionate about because the money was a little better to stack the supermarket shelves. But in recent weeks, the cost of gas and electricity has been the main cause of fear.
We’ve heard of a mother of three who can only afford her kids’ leftovers. The father of a newborn baby who runs his own business and stares at bills he knows he can’t pay. A shop owner in Dundee who can’t sleep because his energy bill is about to quadruple to £53,000.
The one who pushed me over the edge was a man who described how he had two jobs: a day shift and a night shift, six days a week (and sleeping on Saturdays), but this still wasn’t enough to provide for his family.
“The feeling of gloom stays with you,” says Mair. “The listeners who suffer do not convey anger. I feel fatigue; shyness of not being able to cope; despair.”
For now, the only hope people can cling to is that something will eventually happen, but there’s little evidence that the government intends to avert the “financial disaster” that Lewis and others are predicting. In contrast, fuel poverty charities are already in contingency planning mode. Christians against poverty handed out nearly three times as many emergency power tickets in July as last year, and the Fuel Bank Foundation is also experiencing record demand.
They know that the double whammy of winter price hikes will push more households into “deficit budgets” — where their incomes are unable to cover basic expenses on rent, fuel and food — and the impact is being felt by those higher and lower. higher in income scale.
Energy debts are mounting and providers simply do not have the resources to speak to every affected customer and agree on a payment plan. Unless massive pandemic-style solutions are found, more customers are at risk of switching to expensive prepayment meters (if you have a smart meter, utility companies can do this without you having to enter your home). No money to top up? You are literally left in the dark.
To give an indication of the expected magnitude of the impact, several charities are working on plans to create ‘warm spaces’ in community buildings across the UK for people who can no longer afford to heat or even heat their homes. to cook.
The government’s existing support package gives every household a £400 energy rebate, regardless of income, to get through the winter months. If you can afford to donate your money to help fund the frontline work of fuel poverty charities, I would urge you to do so.
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Save the date for Saturday, September 3rd to hear Claer Barrett and over 100 authors, scientists, politicians, chefs, artists and journalists in London’s Kenwood House Gardens. Choose from 10 tents brimming with ideas and inspiration and a range of perspectives, with everything from debates to tastings, performances and more. Book your pass at ft.com/ftwf