Martin Lewis issues a stark warning

[GreenLunchBox]

And I'm really quite scared what's going to happen 😭

twitter.com/MartinSLewis/status/1549305060320067585?t=2QJm_R-HS3gXtUUCoy_8tA&s=19

Just as well I completely ignored him and took a 2 year fix earlier this year (still extortionate compared to previous bills).

He was advising everyone to default on to the variable rates. So when was he wrong? Then or now?

The price cap on gas and electricity is going up again to £3300. It’s then expected to go up again in April 2023 and again later in 2023. It’s not new information it’s been doing the rounds since before the last price cap increase. But lots of people seem to be ignoring it coming.

But at the start of the year he was advising everyone to accept their provider’s default tariff if their deals ended. So if he is correct NOW, anyone who believed him THEN and followed his advice is about to get well and truly stung, so he is clearly very fallible, and has clearly given two firm steers this year that contradict one another.

Me too. I think he stopped a lot of people fixing when they could have/should have. I fixed & talked to my friend about fixing his. He said 'no ML said not to' now he can't fix with BG as an existing customer & he is going to be paying loads more come October unless they offer him a deal & it will still be more than I fixed at.

fixing for 2 years doesn't seem long enough now though.

Surely if he warns people of what’s coming then they can prepare? Rather than just let increased costs surprise them? Yes not everyone might be in a position to save/pay off debt and cut back on unnecessary stuff, but some might.

These costs aren’t down to him but I would rather know what’s coming that not

That was because there were no deals cheaper than the price cap and at that time the price cap was still substantially below the price of energy (which is why so many companies went bust).

The cheapest deal was 30% above the price cap so obviously he was going to say hold fire seeing as he didn't have a crystal ball to predict this ridiculous situation. His advice was the best advice he could give with the info in front of him.

No-one could have predicted how much energy has increased in the last few months and the fixes will have been more expensive than variable late last year and early this year.

The advice probably wasn't a straight 'don't fix', more like 'don't fix unless you've done the sums and are happy that you might be paying more for certainty, also be aware that it's not the DD that you're fixing but the unit rate so don't be fooled by what looks like a good DD price because it might increase if it's based on less than you use'.

With hindsight, some will be better off fixing earlier but you have to take into account that if you fixed late last year, chances are you overpaid last winter which will be partly balanced out by not seeing the enormous increase in the next few months and then after that, who knows?

Martin Lewis doesn't pull a number out of a hat. Cornwall insight predict the price increases quite accurately and these are the figures ML uses. They are predictions as we don't know the exact algorithm that is used to calculate the price cap.

ML has done well, so well in fact that he could easily retire on the money that he made from selling his website. But he spends a massive amount of time campaigning and speaking up for members of the public who contact him.

I fully agree with him that this winter the shit will hit the fan. It's been a long time coming and if you think differently then honestly I hope you're right. But I would much rather be prepared and have a massive chunk of savings to be wrong, than to go into this blind and thinking that ML is just some drama queen.

House sales will drop negative equity will rear it's head again as will unemployment. What I've always called silly money aka disposable income will vanish for many.

It's going to be tough

Me too!

Though like you I do like him and I trust what he says generally.

I think what is concerning here is who is likely to be hit by this. I speak with some experience of this and I promise I'm not trying to single out anyone here...

But as an example I have a close family member who is unable to work and is in receipt of full benefits. He lacks mental capacity though does "manage" his own finances. He has received a couple of grants now and is due another one shortly. His rent is paid by UC, he doesn't pay council tax, he was fortunate enough to already be in credit with his energy, his housing association have recently installed new windows and doors so his home is pretty good at retaining the heat.

Another close family member earns well (ish), always just that bit too much to receive any assistance and hasn't been eligible for any grants or council tax refunds etc... Fixed rate mortgage product is coming to an end in 6 months, on top of ridiculous energy bills and rising costs. There's literally no safety net for these people.

I'm not saying anyone here is right or wrong or that those on benefits should be the ones struggling (I solemnly believe that a society should support those unable to work) but so many people who haven't really experienced the pinch before, will do so and there's no help coming their way!

The fact is that people are predicting the price cap will be £3300 in October 2022

For context, in October 2021, the price cap was £1400.

A £1900 increase

Government support has been £400 off bills plus £150 rebate from a lot of Council Tax bills.

There is also a £650 cost of living support for some people.

So £1200 support

You can see the problem. Plus inflation elsewhere

The Government can't

Ostrich and sand spring to mind.

Whilst I am worried about how we will cope (on mat leave and due to pay extortionate prices next year on childcare)…

If there’s one thing I have learnt in life it’s never to listen to Martin Lewis when making big financial decisions.

1st - student loans ‘best loan you will ever get’ - absolute bollocks. It’s 500% worse than any other loan I have ever got (10-12% interest rate and direct tax compared to a 1.5% mortgage) and the worst terms and conditions I have ever seen. What other loan can you get that says they can change the terms and conditions/ Interest any time they choose.

2nd - last years don’t fix and stay on variable. Still kicking myself about that today 🤦‍♀️

Sometimes it does cross my mind he’s a shill.

🤷‍♀️

Well I looked at the prices, listened to what was happening around the world & decided fixing made much more sense.

so if I could work that out, I'm not sure why he was telling people not to fix.

But if at least three of us on this (so far short) thread could work out that was dicey advice and choose to fix, (and I’m assuming none of us are financial journalists or consumer experts), does that not suggest it was not great advice?

It is stark and shouldn't be. He is a glory hound and yes enjoys his fame, however his tone over the last few months has been increasingly hopeless. Switched from "I CAN help! Switch your bills! Shop savvy! There's an answer!" To "fuck. The poor are fucked" and it's the latter that's realistic and not profitable for his brand. But he seems to be saying it anyway. He's said that his site and his means can do nothing to help now. Even though he could peddle it and offer false hope to the poor, but real profit to himself.

I'm going to sink. I've swum for a long time and now with my energy rates becoming double that of my mortgage, I can't sustain. I've gone from okay to absolutely destitute. So fast. Food is up. Bills are up. Petrol doesn't need to be mentioned. I am afraid

Martin Lewis was on R4 talking about functional illiteracy among UK citizens. Apparently, when he put the PPI claim template on his website, a banker told him that 5% of people using it, downloaded and printed the sheet without adding their details so that no action could be taken.
Many members of the public lack the skills to manage their own finances.

FFS, he is not making things up. It is not scaremongering to tell the truth.

so if I could work that out, I'm not sure why he was telling people not to fix

Regardless of that - the fact is - the price cap that many people are on is going to go up in October by a lot.

This is going to affect a lot of people - and the wider economy.

It's not just him saying this - this is what OFGEM is saying

www.lbc.co.uk/news/energy-bills-could-hit-3200-in-october-ofgem-warning/

Yes, exactly.

I fixed in February and am now in a deal that lasts until March 2024 (by which time I will have downsized).

By then it was easy to read the signs but ML was still saying “don’t fix”. Maybe being a millionaire has had an effect in his advice. Those of us who don’t want to lose all our discretionary income to fuel bills are maybe disposed to profile the risk slightly differently. I’m certainly not making claims to genius, here.

I do quite like ML, but his good work has lead people to follow him blindly.

I wonder what effect these increased bills is compared to say interest rates on a mortgage going from say 3% to 10%?

If your monthly energy bill has increased by £300, this must be similar to a very large increase on your mortgage rate.

He (his website) told me switching gas and electric provider would be "hassle-free" and "well-worth it". I ended up having to go to the Ombudsman and still have nightmares about the trauma. So I've ever forgiven him for that! :-D

I’m so sorry @kittenkipping - I think they will have to beef up cost of living support or face unrest TBH.

Yes but many of us made a different choice with the same info. In general, who takes a risk on the price of essentials going down? Madness.

So what.

All these people saying they fixed - well done you.

This is not about him. This is about an energy crisis and bill crisis. There will be social effects. And it's coming soon.