On Wednesday, money-saving expert Martin Lewis asked Chancellor Rishi Sunak to take action as part of his mini-budget to help families facing the worst cost-of-living crisis in at least 20 years.
Lewis said the coming crisis will be worse for families’ wallets than the financial crash of 2008 or the Covid pandemic, with an additional £1,300 a year on average for gas and electricity and 10 million people who could be hit by fuel poverty.
Calling the situation “unacceptable,” he said people can no longer defend themselves by tightening their belts or refusing treats. Political intervention was necessary so that the British could afford food and heating.
He suggested that one of the options being considered by the Chancellor would likely be to increase the threshold for National Insurance contributions from its current level of £9,568 to £11,500, excluding the poorest from the tax before it is raised. . in April.
Lewis, who is famous for his money saving tips on the website Money Saving Expert, told BBC1. Sunday morning“I have been a money saving expert since 2000. I experienced financial ruin. I have been through Covid. This is the worst – what we have now is the worst.
“Before, prioritizing money meant, ‘Do I go to the hairdresser or to the pub and buy takeout? Now it’s about “I put feeding my kids first, not myself.”
“This is simply unacceptable in our society. And there is absolute panic, and it has not yet begun.
Mr Lewis said the 54% rise in electricity bills due to take effect in April was “catastrophic”, costing consumers an average of £700 a year.
But he said data already factored into the next revision of energy ceilings in October suggested average bills would rise by at least another £600 in the fall.
“Only for energy, at the most conservative estimate, per year we are talking about an increase in bills of 1,300 pounds per year. We will have about 10 million people in need of fuel,” he said.
“We have a real problem of absolute, not relative, poverty that will arise in the UK due to food bank overruns. Debt crisis agencies do not have the tools. As the money-saving expert known for this, I have almost no tools to help people right now.
“That’s not something that money management can fix. The people with the lowest incomes should not be told to (tighten) their belts that this will work. We need political intervention.
Mr Lewis said the factors behind the cost-of-living crisis were structural issues, the Covid recovery, Brexit, the push for zero carbon emissions and the war in Ukraine.
“I’m not saying any of this is bad,” he added. “This is exactly what is hitting the fuel crisis we have right now. »
He suggested that the Chancellor might consider raising the threshold at which people start paying on national insurance in order to save the poorest from the tax before it is increased in April.
But he said there was no chance for Mr Sunak to turn down a 1.25 percentage point hike after the chancellor and prime minister insisted on having to pay for rising NHS and welfare costs.
“There’s definitely an opportunity here,” Lewis told the BBC1 Sunday Morning. “We have a national insurance increase — a 10% or 1.25 percentage point increase that is expected in April.
“I don’t see it not happening. But I think there is an opportunity to raise the national insurance floor.
“Currently you start paying the equivalent of £9,600 a year. If you raise it by a thousand or two, then at the net low cost of income, you can get rid of the increase. I suspect he might want to do something similar.