Martin Lewis warns of 'fiscal punch in the face' next week

Martin Lewis has warned Brits should get ready for another "fiscal punch in the face" next month amid rising energy bills and the spiralling cost-of-living crisis.

From 1 April, the energy price cap will rise by 54% – meaning the typical annual energy bill will rise by £693 to £1,971. Some analysts have suggested the Ukraine war could push bills higher than £3,000 by the end of the year.

Experts have warned that rising energy bills will cripple households on low incomes, particularly when combined with the highest inflation in decades and the rise in National Insurance.

At a business, energy and industrial strategy committee in parliament on Tuesday, the Money Saving Expert told MPs that rising energy bills will have a visceral fiscal impact on millions of Brits.

"On 1st April, people are going to feel a fiscal punch in the face," he said. "When that goes up for some of the typical use of £1,971 - that's a £700 rise."

Asked by MPs what the government need to do to help struggling Brits, Lewis had a simple message to Chancellor Rishi Sunak.

"To give them more money. And it really is as simple as that," he said.

Read more: Martin Lewis: Rishi Sunak needs to ‘suck it up’ and help with cost of living crisis

He added: “Even if he’s not going to come up with some plans, some soft guidance that - if things continue to be as catastrophic as they are right now - that there will be more help would be beneficial for people's state of mind.

Because there are many people that are absolutely panicking right now. Not least those with disabilities using oxygen concentrators… or electric wheelchairs who have disproportionate energy uses.”

Ofgem's energy price cap is reviewed twice a year, with the next review in July. The consumer champion warned the high cost of wholesale energy rates now run the risk of pushing the energy price cap even higher in October.

"On 1 October, the price cap then is based on an assessment period of wholesale average prices between 1 February and the end of July," he said. "We are seven weeks through that 26-week period.

Those seven weeks have been figured the highest-ever wholesale rates in history... a completely unprecedented level, both because of the structural changes that have been going on in the market due to COVID and the dreadful situation in Ukraine.”

Read more: Risk of UK recession is 'very, very high': Here's what that means for you

It comes amid growing pressure on Sunak ahead of the Spring Statement, where the chancellor is being pressured to pull something out of the bag to help struggling Brits.

In February, Sunak announced a £350 "Energy Bill Rebate" scheme in response to rising energy bills. However, the scheme has been criticised for not being enough and because £200 of the scheme will be effectively repaid by consumers over the following five years.

Lewis has described the scheme as a "loan-not-a-loan" - and criticised it for not providing Brits with more support.

"Even if you take both of those measures and you want to pretend a little cash that is £350 to cover... a year increase that is clearly not enough," he said.

Gillian Cooper, head of energy policy at Citizens Advice, echoed many of Lewis' warnings.

“Without further support, we’re heading towards a crisis where a significant proportion of the population cannot afford to keep safe and warm in their homes," said Cooper.

The remarks come the week after the Institute for Fiscal Studies (IFS) warned the economic hit to UK households from soaring energy bills could top £40bn in the coming months.

Watch: Spring statement: From fuel prices to energy bills - what to expect from the chancellor's announcement