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Beat the Squeeze

...with Britain’s most trusted money-saving expert MARTIN LEWIS

By DANIEL JONES CONSUMER AFFAIRS EDITOR

IT SOUNDS for a minute like Martin Lewis is throwing in the towel when he says his famous money-saving tips might not be much use for millions facing soaring bills. He’s not, of course, but he does say things have become so bad – ‘the worst since I became the money-saving expert in 2000’ – that only the intervention of Boris Johnson, Rishi Sunak and regulators can help those on the coalface of the cost-of-living crisis.

In an interview with The Mail on Sunday, Mr Lewis outlines a series of things they must start working on this week, from Treasury money to cut energy bills to banning profiteering from petrol stations.

If they don’t, forget the civil unrest he warned of last week. ‘There will be some families who will have to choose between freezing or starving, and may face both. It’s hitting the middle classes too,’ he says.

Martin Lewis made his name telling savvy Brits to get zero per cent credit cards and put the cash they save into savings accounts, use cashback sites, collect vouchers and choose a cheaper brand of groceries – all things families did more and more after the 2008 credit crunch.

But with household bills and costs for food and petrol rising at levels not seen for 40 years – and wages, pensions and benefits not keeping pace – it’s no longer just about empowering families with ways to save.

And that is where the other side of his ‘cutting your costs, fighting your corner’ mantra comes in – his campaigning work that pushes Ministers into action, as he did on bank charges and PPI.

Mr Lewis was recently quoted as saying ‘I’m virtually out of tools’ when talking about families on lower incomes trying to cope with energy bills.

‘I was making a point that for some people money-saving, which is what I spent my career doing, will not solve this problem,’ he says. ‘And, therefore, it is political levers that need to be pulled to solve the problem.’

His point is that the very poorest are already doing what they can. He gives short shrift to ‘patronising’ politicians who suggest they do his famous ‘downshift challenge’. As he says: ‘For those on the lowest incomes, I would be very surprised if they’re buying Tesco Finest.’

But, before Mr Lewis tells us what politicians need to do, he adds: ‘Now, for many people, there are things you can do to help yourself.’ In fact, if you think you are bad with money, you are exactly the sort of person Martin Lewis says he can help the most.

The key is to focus on all the small stuff – the ‘look after your pennies and the pounds will look after themselves’ motto.

He said: ‘The big picture is just too scary. So if you look at the small picture, go to every single thing that you spend money on and, first, ask yourself, “Can I do it cheaper and the same way?”

‘And, then, even if you can, ask yourself, “Do I need everything I’ve got? What do I need? What can I reduce?” The more income you have, the more stuff you do, the more you can save.’

He added: ‘The real difficulty is that people are always saying, “You can’t help me, I’m terrible with money.”

‘Actually, that’s not the case. The people I can’t help are the people who have already done everything and are on the lowest incomes and they have no wriggle room, and those are the ones I’m worried for most at the moment.’

For anyone hoping to have a normal Christmas – after the past two were ruined by the pandemic – he has bad news: ‘I don’t think there is much hope of this ending before Christmas.

‘We are not in the middle of a cost-of-living crisis, we are at the start of a cost-of-living crisis.

‘It is almost certainly going to get worse. The problems are going to peak over the winter months, from October onwards, when we’re expecting to see energy bills rise again by another 30 per cent.

‘Energy is the biggest single issue.’ The scale is illustrated with

We’re not in the middle of a cost of living crisis, we’re at the start

what OAPs on just the state pension face: ‘When you stop to look at a prediction of £2,600-a-year energy bills due in October, that is over a quarter of the state pension. That’s just energy bills – that’s not rent, that’s not anything else, that’s energy bills.’

And Ofgem, the regulator that should be helping families, is not, he says. Last week, he called the watchdog a ‘f ****** disgrace that sells consumers down the river’. He apologised to Ofgem staff, but said he stood by his ire at the organisation over changes to the price cap that penalises firms trying to offer cheap fixed deals.

He said: ‘If prices drop, a company who wants to offer a cheaper

deal has to pay your old supplier to take you and has to pay much of the difference in wholesale prices to the old supplier.

‘Now, clearly, that is a monumental disincentive from companies offering cheaper deals.’

It’s not the only Ofgem blunder. For the latest price cap, they upped the level of the standing charge – the fixed amount households pay – on energy bills.

Mr Lewis says: ‘Those who have the lowest bills are, effectively, proportionally paying more for their energy usage. And you’re paying £250 a year even if you turned all your energy off and that’s quite startling. It’s also not very good for the green agenda.’

What can Mr Johnson and Mr Sunak do to help? Get money into people’s pockets, he says. There

There is room for the Government to help people get through this

are a few ways to do this, and he doesn’t mind which are used, but the big challenge is how many people you help. He says: ‘From a political angle, there are two categories of people who need help.

‘The first are those on the very lowest incomes. The problem, politically, is if you help those on the very lowest incomes, many of whom won’t be working or will have only limited work income, then across middle Britain, people with £30,000, £40,000, £50,000 combined family income, some of them will understandably be saying, “Hold on, I go out to work, I work really hard, I do everything you ask of me and you’re helping those people but my life is being substantially curtailed by what’s going on.”

‘And that is the great political difficulty here. It is the question of how far up the net do you stretch the help.

‘The first thing we have to do is for politicians to make a decision that people need more money. After that, how we distribute it is important.’

But he doesn’t like the so-called £200 ‘loan, not loan’ due to come off bills in October. He calls it that because future bill-payers have to pay it back – with £40 added to all bills over the next five years – including younger people not benefiting from it now.

Mr Lewis says: ‘My hope is the Chancellor will convert it to just a reduction of the bill and there won’t be a payback element.’

He thinks there also needs to be more targeted help. The £150 council tax rebate for those in band A to D properties ‘was not a bad system’ that could be repeated.

Another is expanding the criteria for the warm home discount. At the moment, it’s a £140 deduction from winter energy bills, that mainly benefits OAPs without bumper private pension schemes and some lowincome families.

But who is going to pay for this? ‘I get there will be some people reading this saying, “Where’s your magic money tree?”

‘I think the priority of the nation is fulfilling basic needs. We are rich enough as a country to do that – we did it for the pandemic. There is room to help people get through this and, ultimately, if you look on the cost of society, if we don’t help people get through this and it has an impact on their physical and mental health, then we have huge knock-on costs to the NHS and the welfare budget.’

What else can be done? Mr Lewis points to a practice, highlighted in last week’s Mail on Sunday, where almost all big broadband providers, including BT, are putting up bills, in contract, by inflation plus 3.9 per cent.

‘That’s maybe getting close to profiteering, in my view,’ he says.

In fact, profiteering is another thing he would like regulators, and the Government where there are no watchdogs, to crack down on. This week, the RAC told how petrol retailers are taking an average profit of 2p a litre more than before the 5p cut to fuel duty.

‘I am concerned that there are some companies who are seeing it as an opportunity to increase prices, even when their costs are not going up, and to increase margins.

‘I think we need to tighten down on those. If we’re all in it together, right, then we need to make sure there isn’t a profiteering advantage being taken by some firms to sneak in moves that increase profitability.’

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