On April 1, Ofgem increased the energy price cap by 54 per cent meaning households paying their heating bills by direct debit will see an average rise of nearly £700 per year. The change impacts around 22 million households.
The price cap does not put an absolute limit on how high a bill can be, but limits the amount a company can charge for each unit of energy used. The increase was driven by soaring global wholesale gas prices, which started rising due to demand outstripping supply in the wake of the pandemic, and has been exacerbated by Russia’s invasion of Ukraine.
On top of that, this week the government has increased national insurance payments by 1.25 percentage points – which ministers said would go towards tackling the NHS backlog and improving social care – meaning workers will take home even less of their earnings.
Lewis and his team sifted through thousands of tips and tricks from social media followers to create the 90-point “survival kit” for those who can’t afford to wait for policy changes to help them get through the cost of living crisis.
The advice ranges from how to stay warm at home without turning up the thermostat – with the team concluding that USB-charged items such as heated gloves and electric gilets were cheapest – to saving money by getting possessions fixed at a local repair cafe instead of buying a new one.
Lewis also points out that 16 million Brits are out of contract on their broadband and mobile, and could quickly halve those bills by shopping around.
The Household Support Fund, a temporary cash pot for councils to give one-off financial support to struggling households, features in the survival guide as Lewis encourages people to speak to their local authorities.
Stop Mass Homelessness
Help us stop mass homelessness
Unless we act, the UK is facing a homelessness crisis
Meanwhile around half a million minimum-wage workers are thought to be underpaid, the money saving expert said, explaining how employees can check if they are due money back.
Doing one fewer load of washing per week, keeping a washing machine to a maximum 30-degree cycle and only using it when it’s full can cut energy bills by around £28 per year, the guide explains, while it’s even possible to “make money from crisp bags, empty jam jars and wine corks” for those willing to sell their rubbish.
10 ways to save money during the cost of living crisis, from Martin Lewis
- Get £150 cash for switching bank accounts
- Check if your child is eligible for free school meals
- Use food and drinks-sharing apps to collect free meals from local bakeries, supermarkets and neighbours
- Check you’re not missing out on thousands of pounds in repaid childcare costs
- Claim a council tax discount if you’re eligible (such as living alone, with students, having a live-in carer or receiving pension credit)
- Get tax back on work uniform which you wash and repair yourself
- Explore online “freecycle” groups for free furniture, clothes and toys
- Find the cheapest petrol in your area
- Trade in old mobile handsets for cash
- Check if you are eligible for a railcard for cheaper transport
The energy crisis is “catastrophic for those with the lowest incomes”, Lewis said, predicting a “material drop in the standard of living for most”.
“For some there is sadly no route to cut expenditure below income,” he added. “That will need political intervention. For others, we need a collective endeavour, to work together to take financial pressure off where we can.”
Read the full cost of living “survival kit” here.