Consumer champion Martin Lewis has warned that some members of the public could end up paying £10,000 a year on their energy bills.
It comes after Ofgem announced that the new energy price cap, for the average household, will rise to £3,549 a year from October 1. It will mean an increase in bill costs of 80 per cent for the 24 million households on a standard tariff across England, Scotland, and Wales.
Meanwhile, the 4.5 million pre-payment meter customers across Britain - who are among the most vulnerable to price increases - will see their annual bill increase even further to £3,608. However, Mr Lewis has warned that the situation is even direr, with some potentially paying the equivalent of a house deposit on their bills.
Read more: BREAKING: Energy price cap will rise to £3,549 in October, Ofgem announces
Appearing on ITV's Good Morning Britain, Mr Lewis warned that the situation is a "genuine social and financial catastrophe that is putting lives at risk". He added: "I’m noticing many media organisations saying that the price cap is £3,549 a year – that isn’t correct.
“The price cap is actually a cap on the standing charges and unit rates that you pay, they have gone up by around 80%. The figure that’s quoted, the £3,549, is what the cap would be for someone who has typical usage – of course, most people don’t have typical usage, they’re more or less.
"That means there is no maximum amount that you can pay for gas or electricity. You could easily be paying £5,000 or £10,000 a year if you have high usage.
“I worry terribly for some of those who have disabled children or disabilities themselves who need lots of electrical equipment to keep their houses warm because of medical conditions.”
He continued: "The prediction now in January is up another 51% on top of where we are now and that would take a typical bill and direct debit to £5,386 a year. And that is not such a crystal ball prediction because we are seven months through the 10-month assessment period for the January price cap. ”
“So if we look at the totality across the winter, from October until March, you are probably talking on typical use an average bill of over £4,400 a year, typical pro rata – it is totally unaffordable.”
He also warned that a potential fallout from the soaring energy price cap is people refusing to pay their bills, a movement which he says is "growing". He said: "I think the Don’t Pay movement is growing. There are dangers to being in the Don’t Pay movement as an individual.
“All I can say is what would happen in a typical case scenario where an individual refused to pay – what is far more difficult to predict is if there is a massive movement not to pay. I think what is safest for me to say is while I think it should have come earlier, my hope is on September 5 there will be a new Prime Minister.
"We’ve heard from both the candidates, but they seem to indicate they understand the scale of the crisis – what we need to hear is concrete solutions. And let’s be absolutely plain: there are many methods that you can put in place to alleviate and mitigate some of the terrible damage that the rising energy prices are causing.
“So I’m going to be agnostic over the solution, but it will involve spending substantial amounts, billions of pounds of Government money, to stop some of the most vulnerable and many middle-income earners from having some terrible choices to make this winter. We have to hope that will be in place.
“And I suspect if it isn’t in place, then people coming from the Don’t Pay movement are going to become a louder voice in this country.”
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