Six million households could have savings wiped out by energy bills - but PM promises 'pipeline of cash' soon

26 August 2022, 22:50

Six million households face having their savings decimated by high energy bills, but Boris Johnson has promised a "pipeline of cash" soon
Six million households face having their savings decimated by high energy bills, but Boris Johnson has promised a "pipeline of cash" soon. Picture: Alamy

By Daisy Stephens

Around six million households could have their savings totally wiped out by surging energy bills, economists have warned - but Boris Johnson has promised a "pipeline of cash" is coming in the next few months.

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The National Institute of Economic and Social Research (NIESR) said the latest hike in the energy price cap means an additional 2.2 million households will have burned through all their savings by April 2024.

It takes the total to around six million.

But Boris Johnson, entering his final few days in office, has said the Government is poised to deliver a "big, big package of help and support", promising a "pipeline of cash" in September.

Read more: 'Lives will be lost': Dire warnings as Ofgem boss says energy price rises will get 'much, much' worse

Read more: Hundreds gather at Ofgem HQs to protest 'catastrophic' energy price hike

"There's a pipeline of cash coming through over the next few months and through the autumn and the winter," he told broadcasters during a trip to the South West London Elective Orthopaedic Centre in Surrey.

"But that is clearly now going to be augmented, increased, by extra cash that the Government is plainly going to be announcing in September."

He said the support "will go on for a few months and it will go on over the winter".

Boris Johnson promised on Friday that support is coming
Boris Johnson promised on Friday that support is coming. Picture: Alamy

Britain's cost of living crisis worsened on Friday as Ofgem announced its price cap will hike to £3,549 a year,

It leaves squeezed Brits facing a hefty increase in their energy bills amid demands for the Government to do more.

The new cap is a massive 80 per cent rise from April's £1,971.

Read more: Backlash after Chancellor tells people to cut back as energy prices rocket

Read more: Energy price cap explained: How will the increase impact you and how much prices are rising?

Money Saving Expert's Martin Lewis told LBC the price hike is a "catastrophe".

"I have catastrophised this because it is a catastrophe," he told James O'Brien.

"I'm now begging and pleading with whomever the new Prime Minister is.

"It should have been dealt with far sooner."

Protesters took to the streets after the new price cap was announced
Protesters took to the streets after the new price cap was announced. Picture: Alamy

He went on: "I am here to beg, to plead, to pray that our new Prime Minister understands how urgent this is and, while we've left it late, on the 5th of September, on that day, lays out concrete plans that will stop a sizeable chunk of our population having genuine health risks because of lack of food and heat due to this horrible expense, and another sizeable chunk of lower and middle earners from having the catastrophic impact on their standard of living."

Hundreds of people protested outside Ofgem's office across the UK on Friday night, after the price cap increase was announced.

Adam Scorer advises to talk to energy suppliers if you 'fear debt'

The new cap will be apply from October.

Both the Government and Ofgem, the energy regulator which sets the cap, laid the blame firmly at Vladimir Putin's feet, as Russia tries to drive up gas prices in a bid to break Western support for Ukraine in his bloody invasion.

Jonathan Brearley, CEO of Ofgem, said: "The price of energy has reached record levels driven by an aggressive economic act by the Russian state.

"They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy.

Read more: 'A catastrophe - I'm begging you to help': Martin Lewis pleads for next PM to act after price cap hikes to £3,500

Watch: Minister pledges 'further package of support measures' for Brits struggling with cost of living

"Ofgem has no choice but to reflect these cost increases in the price cap."

Mr Brearley called for the new Prime Minister, when they are elected in September, to "act further to tackle the impact of the price rises".

"We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action," he said.

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