Martin Lewis warns next UK prime minister of ‘financial cataclysm’

theguardian.com:

The consumer champion Martin Lewis has warned the next prime minister that they stand to inherit a country on the brink of a “national financial cataclysm” as soaring energy bills threaten to tip households into crisis this winter.

The founder of the Money Saving Expert website has become increasingly vocal in recent months on behalf of financially stretched households, amid surging inflation and a cost of living crisis.

Lewis predicted that further gas and electricity bill price rises this autumn would require the provision of “warm spaces in public buildings” such as libraries, where people who can no longer afford to heat their homes can find shelter.

“The winter is going to be bleak,” said Lewis. “I believe unless action is taken we are facing a potential national financial cataclysm.” His comments came as new figures showed that in May, British workers’ living standards dropped at a record rate after pay rises failed to keep pace with inflation.

In an “open video letter” to the remaining candidates in the Conservative leadership contest, Lewis said the debate had ignored a worsening cost of living crisis, with energy bills set to jump in the autumn when a new higher price cap is expected to cause the average household bill to top £3,200.

A recent update from analysts at Cornwall Insight predicts that in October the energy price cap will rise to £3,244 a year. The default tariff cap is expected to then rise again in January, to £3,363 a year. The tariff, set quarterly by the energy industry regulator, Ofgem, is already at a record high of £1,971 a year.

This looming 65% increase in energy costs would have huge ramifications, said Lewis, with a typical energy bill now equal to more than a third of a state pensioner’s