Martin Lewis explains in the simplest terms what is happening to your energy bills

·3-min read

Watch: Martin Lewis breaks down energy bills rise in simplest terms

Martin Lewis has broken down in the most simple terms what exactly the energy bills increase will mean for Britons.

The financial journalist and broadcaster, founder of consumer website Money Saving Expert, said people should think about the hikes in terms of percentages and not the average typical use bill.

The increase to the energy cap announced last month by regulator Ofgem will mean the average annual UK bill will rise from £1,971 to £3,549 from October.

Market researchers Cornwall Insight predict that the average bill in January 2023 will increase to £5,387 a year, and £6,616 a year by next April, as the country grapples with a potentially catastrophic cost of living crisis.

But Lewis has stressed that this figure is only an example of a household with a "typical use", which he said isn't the case for the vast majority of Britons.

Read more: Martin Lewis says Britons will pay £273 on energy bills before they use fuel

Finance expert Martin Lewis has explained what exactly energy bills increases mean for Britons. (ITV)
Finance expert Martin Lewis has explained what exactly energy bills increases mean for Britons. (ITV)

Instead, he advised consumers to factor in the percentage increase from October and apply it to their own monthly bills.

Speaking while presenting ITV's Good Morning Britain on Monday, Lewis said: "I always quote the percentages.

"On average, in April, we had a 50% rise and in October there's an 80% rise.

"If you want a very rough estimate of what's going to happen to your bills, for every £100 a month you pay now, you will pay £180 a month from October.

"That is a much more accurate way to think about it if you're on a price capped tariff."

A general view of a domestic radiator room thermostat. Families across Great Britain will find out on Friday how tough energy bills will be this winter but they may have to wait to discover what the Government will do to help Picture date: Thursday August 25, 2022.
Britons are preparing for a difficult winter with energy bills set to skyrocket. (PA)

He said that 85% of people in England, Scotland and Wales are on a price capped tariff.

"What is capped is the standing charges, so the daily charge you pay for energy, and the unit rate that you pay," he explained, adding that the £3,549 estimate is "an illustrative example for somebody on typical use, which is an Ofgem measure".

He said: "No one's really on typical use."

Lewis also pointed out that the cap varies depending on usage and region.

"But if you just want a really simple sum, for every £100 you spend now, it will be £180 in October, on average," he said.

"Quite simply, that is unaffordable for millions of people, and it is going to get worse."

Read more: Energy boss compares rising bills to 'paying £25 for a pint of beer'

EMBARGOED TO 0001 SUNDAY SEPTEMBER 4 File photo dated 03/02/22 of an online energy bill. One in 10 Scots are left with no money after covering essential monthly expenses, according to new analysis from Citizens Advice Scotland. The stark findings, based on polling of 1,416 people by YouGov, come even before energy bills are set to soar from October. Issue date: Sunday September 4, 2022.
Energy bills are set to soar again in the UK in October. (PA)

A poll published by YouGov last November found that one in five Britons do not understand at all how their energy bills are calculated, although that proportion is likely to have increased in recent months as the country has been getting to grips with soaring prices.

Lewis's advice comes as the Conservative Party prepares to announce its new leader on Monday lunchtime.

The favourite to be named party leader – and prime minister – is foreign secretary Liz Truss, who is reportedly considering a freeze on energy bills this winter.

Truss has been criticised throughout her leadership campaign for refusing to reveal details of her plans to tackle the crisis.

Watch: Mother says it's a choice between heating and food this winter