Money Saving Expert founder Martin Lewis has issued a warning to anyone thinking of cancelling their energy direct debit before April’s price hike.
The financial expert said that as we enter a cost of living crisis, bills will soar to record heights – as he urged the UK Government to intervene.
The Government has announced a £200 energy rebate but many experts warn that this will not be enough.
What did Martin Lewis say?
Mr Lewis noticed that many people were considering cancelling their direct debits to move to the pay-as-you-go system, but he has issued a stark warning against that.
His tweet read: “WARNING! Many talking about cancelling energy Direct Debits to ‘keep in control’ and just pay when billed.
“Yet be aware that’s usually charged at a HIGHER RATE. Price cap (for someone with typical use) paying by Monthly DD £1,971, Prepay meter £2,017, Quarterly bills £2,100.”
Martin Lewis on Energy firms increasing their direct debit
Martin Lewis has also warned about “worrying issues” of energy companies increasing customers’ direct debits disproportionately to the price cap increase, even for those in credit.
He told MPs: “There is no reason to double someone’s direct debit when they’re in credit and the price cap is going up 54%.
“That’s not mathematically sound and it’s a breach of licence conditions.
“I have been very concerned that a number of companies are doing it to improve their cash-flow situation at the expense of their customers, and I would like to see the regulator crackdown on that quite substantially.”
He added: “It’s important to remember that there is no competition in the market anymore. This is not a market… no one can switch.”
Gillian Cooper, head of energy policy at Citizens Advice, has told MPs that the Government’s current energy bill support measures are “insufficient for the scale of the crisis we’re facing”, adding: “We have to recognise that there are millions of households that are simply unable to cope with the energy bill increases that we’re going to see this year.”
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