The consumer champion, who has built a loyal following for his financial advice, said lower to middle income earners have ‘nothing left to cut back on’.
He said the rising level of inflation affecting prices of food and heating has left people unable to find a way to pay their bills.
He warned if people cannot keep their families fed or warm then ‘civil unrest is not very far off’ and urged Rishi Sunak to ensure all middle income earners – those earning around £30,000 a year – have at least half their energy price rise covered this April.
In an interview with the Telegraph, Mr Lewis said the current cost of living crisis is the worst since he found his website, Money Saving Expert, in 2003, and that he was ‘scared for people’.
He told the newspaper: ‘For people towards the bottom end, there’s nothing to cut back on. It is not an exaggeration to say that there are people we have to prevent freezing or starving.
‘We need to keep people fed. We need to keep them warm. If we get this wrong right now, then we get to the point where we start to risk civil unrest. When breadwinners cannot provide, anger brews and civil unrest brews – and I do not think we are very far off.’
Money Saving Expert Martin Lewis (pictured) has warned ‘civil unrest isn’t far away’ as the cost of living crisis grips Britain
Mr Lewis demanded Chancellor Rishi Sunak (pictured) does more to ‘keep people fed and warm’
At the start of this month, energy bills rose by £700-a-year to the £2,000 barrier meaning millions of Britons face being unable to afford to put the heating on, cook warm meals or have hot water.
On April 1 – nicknamed ‘Awful April’ because the cost of living crisis really began to bite – energy bills soared by 54 per cent, the equivalent of £693 per year, while petrol rose by 39 per cent, an increase of £23 per tank.
Add in increased council tax contributions, a 1.25 per cent increase in National Insurance contributions and other costs, including increased water, broadband, phone and TV bills, the average household is expected to feel the pinch this year.
Mr Lewis, who originally started using his website to help people save hundreds of pounds a year, said people are now stopping him in the street and sending him messages about how they are unable to make their finances add up.
He said he feels ‘slighty sick’ that the current cost of living crisis has forced him to start a new feature on his website called Heat The Human which includes suggestions such as putting hot water bottles inside sleeping bags as it is too expensive to heat the whole house.
‘This is one of the richest countries in the world. It’s pretty desperate, isn’t it?’ he added.
Hell for households: How much more YOU will be paying in bills from April 1 (and it’s no joke)
British households are facing unprecedented rises to most of their monthly bills
Energy bills – up 54%, £693 a year
Annual energy bills will soar by 54 per cent today as regulator Ofgem raises the price cap for an average home to £1,971 from £1,277. Experts believe it will be £600 more from October.
Petrol – up, 39%, £23 per tank
Fuel prices have surged to a record high of £1.66 a litre of petrol and £1.78 for diesel as it emerged that motorists have been hit by daily increases for six weeks.
The cost of filling up a typical family car with a 55-litre tank is now £81.41, up from £58.56 in May 2020, when petrol prices plunged because of the first coronavirus lockdown.
Council tax – up 3.5%, £67 a year, on average
More than half of town halls will charge over £2,000 in average council tax bills this April. The typical Band D bill in England will be £1,966 – up 3.5 per cent on last year. The highest in the country will be in Rutland, where residents will receive bills of £2,300. The highest increase is in Sandwell in the West Midlands – up by 5.2 per cent. For the first time, more than half of local authorities will charge in excess of £2,000 for Band D households.
National insurance, up 1.25%
National insurance increases worth around £6billion are taking effect in a few days.
For employees they would previously pay 12% on earnings up to £50,270 and 2% on anything above that. From April 6, the rate goes up to 13.25% and 3.25% respectively. For the self-employed, rates will go up from 9% and 2% to 10.25% and 3.25%.
Payments will only be collected on wages above £9,880, although this rises to £12,570 in July.
Water bills – up 1.7% – £7, a year
Water bills in England and Wales will rise by an average of 1.7% to £419. South West Water customers will pay £515.
Broadband, phones and TV – £42 or more a year
Sky is hiking prices of broadband and TV channels by an extra £43 a year from April in a fresh cost of living blow. Families will need to fork out an additional £3.60 a month, Sky estimates, as it raises the costs across its services.
Sky joins other broadband and TV providers such as Virgin Media, which is already set to hike prices by an average of 4% from March 1, 2022.
And BT, TalkTalk and Vodafone are increasing prices by as much as 9%.
Vehicle excise duty – up 6%, between £10 and £30 a year
Tax on a band E car is increasing from £155 a year to £165. The most polluting cars are subject to a £30 increase.
Pint of beer – up 5%, 20p each
A cut in VAT has ended meaning landlords say they must add 20p or more to the cost of a pint. To make ends meet they say that £7 a pint might be needed in some London pubs.
Lateral flow tests – £1 to £3 each
Britons will face paying up to £3 per lateral flow test from April 1, despite French supermarkets offering them for three-times cheaper.
The Prime Minister scrapped ‘free’ lateral flow tests from today. People who opt to keep testing face spending £20 for a box of seven — around £3 per test.
Total increase: Up to £2,620-a-year per household
Mr Lewis called on the Chancellor, who he praised for introducing furlough at the start of the pandemic but then criticised for not doing enough to prevent the scheme’s loopholes, to ensure people receive enough money to pay their energy bills.
Mr Sunak has unveiled some measures to help with rising energy prices, including a £200 loan to assist with energy bills, which comes through in October, but Mr Lewis called the idea ‘hideously unpopular’ and urged him to offer a guarantee that lower to middle income earners would receive support with at least half of their new energy bills.
It comes as Mr Sunak moved his family out of his grace and favour Downing Street residence as he faces renewed backlash over his family’s financial affairs.
Removal vans packed with the couple’s furniture and personal items were pictured outside No 11 on Saturday as the couple make the move to their luxury West London home for family reasons.
A velvet armchair, shelving unit and several other personal belongings were loaded onto two lorries, in a move that has been long-planned because Mr Sunak’s eldest daughter is heading back to boarding school, reports the Mirror.
The Chancellor was battling to save his political career last night following new revelations about his family’s tax arrangements, including an astonishing claim that he broke US immigration rules.
On Friday, his wife Akshata Murty sensationally volunteered to pay UK tax on her global fortune in a bid to save her husband’s ailing political future.
In a dramatic U-turn, the Indian heiress said she would no longer apply to pay tax on a ‘remittance basis’, which allows non-doms to avoid UK tax on foreign earnings in return for a £30,000 annual fee.
Mr Sunak’s allies have suggested he would consider quitting the Cabinet all together to spare his family fresh scrutiny and protect their privacy.
The energy price cap will jump from £1,277 to £1,971 – an increase of £693 – with official forecasts suggesting it will increase by a further £788 in October.
An independent assessment for the Daily Mail found that price rises and tax hikes this month alone will cost a typical family of four more than £134 a month – equal to more than £1,612 a year.
This week, the Chancellor’s controversial hike in national insurance contributions kicked in, costing someone earning £30,000 an extra £255.
Council tax bills are rising by an average 3.5 per cent. And the hospitality sector warned that the decision to increase VAT to its pre-pandemic levels would put further pressure on inflation rates which are already forecast to hit 9 per cent this year.
Hospitality firms warned price rises in pubs and restaurants are ‘inevitable’ from today when the reduced rate of VAT on the sector goes up from 12.5 per cent to its pre-pandemic level of 20 per cent.
Last month, Mr Lewis urged households to submit photographs of their meters to suppliers for what he called ‘meter reading day’, a move which led to providers appearing to accuse him of causing glitches on their websites and E.On accusing him of ‘bringing down Britain’.
Households were encouraged to submit evidence of their meter readings before midnight on March 31 to show exactly how much energy they had been using. This was to prevent firms from estimating a customer’s energy usage before April 1 and potentially overcharging them at the new higher rate.
The guidance only applied to traditional meters rather than ‘smart’ ones, which automatically send data to suppliers.
A tweet by E.On’s official account read: ‘Unfortunately the website and phone lines of every supplier are being hammered today. Martin has once again created an unprecedented demand bringing down Britain.’
The tweet was swiftly deleted, with the firm admitting it was an ‘ill-considered and off-the-cuff remark’.
Octopus said: ‘Martin Lewis’ advice for customers to submit meter readings has driven incredible traffic.’
Mr Lewis appeared to laugh off the barbs, saying he thought the E.On tweet was ‘someone trying to be funny’. He added: ‘I’m always forgiving of human error (as I make them myself) so let’s move on.’
Mr Lewis was in tears on BBC Radio 5Live on March 31 as he read out emails form people who were terrified about how they will pay their energy bills.
The cost of living crisis comes as almost all workers will see the government take more off their pay packets this month after National Insurance (NICs) rates were raised by 1.25 percentage points – breaking a Tory manifesto vow.
The PM tried to quell fury at the move amid a wider cost-of-living crisis by insisting it is ‘necessary’ to take ‘big decisions’ to bail out the NHS and social care after the pandemic.
Mr Johnson this week said the Government would help families ‘in any way that we can’, including the £22billion package of measures announced to support households ‘through what are unquestionably tough times caused by the end of the pandemic, the global inflation problem, the energy price spike’.
However, the premier cautioned there is a ‘limit to the amount of taxpayers’ money’ that can be used to address the ‘global’ problems with energy prices.
Mr Sunak has pledged to ease the impact by lifting the threshold at which people start paying NICs contributions by £3,000 – but that will not take effect until July.
Overall the tax burden is set to reach the highest in 70 years, while living standards are predicted to see the biggest fall this year since records began in the 1950s due to more tax, soaring inflation and energy costs.
Ministers insist the tax rise, tagged the Health and Social Care Levy, is needed to help tackle Covid backlogs and reform the adult social care system – raising £39billion over the next three years.
The Conservative Party 2019 election manifesto, which helped Mr Johnson deliver a landslide majority, pledged ‘not to raise the rates of income tax, national insurance or VAT’.
But senior ministers have argued that the impact of the coronavirus crisis meant that tax promise to the electorate could no longer be kept.
Mr Sunak confirmed he was pushing ahead with the tax rise in last month’s Spring Statement.
The Treasury said raising the threshold to £12,570 from July will give 30million workers a tax cut, which one source said meant ‘we have spiked the hike for most people’.
Labour leader Sir Keir Starmer has described the increase in national insurance rates as ‘the wrong tax at the wrong time’.
The Government has been facing fresh pressure to scrap the hike as new figures suggest the Chancellor will rake in an extra £38.6billion in VAT over the next four years.
Families will pay an estimated £430 more in VAT next year compared to last as skyrocketing inflation pushes up prices in shops, according to analysis by the Liberal Democrats.
The party is urging Mr Sunak to slash the top rate of VAT from 20 per cent to 17.5 per cent for one year.
Separate analysis by the party, shared with the Mail, shows the hospitality sector is facing a £360million tax bombshell as a result of the NI hike.
Pub, restaurant and hotel owners are set to pay more than £215million this year to due to the hike, while hospitality workers will face an extra tax bill of nearly £145million.
The British Chambers of Commerce (BCC), which represents businesses across the country, is also urging Mr Sunak to scrap the NI hike as soon as possible.
How will the national insurance hike affect you?
The pain of the rise in national insurance will be felt by people on their next payday, as they try to juggle surging living costs on a shrunken wage packet, experts have warned.
Here is a look at why the increase is happening and why ‘awful April’ is seen as just the start of a string of tough months ahead:
Why has the increase been introduced?
The Government says the 1.25 percentage point rise in national insurance (NI) will be spent on the NHS, health and social care in the UK.
From April 2023, the NI rate will return to the 2021-22 level, as a new health and social care levy introduced.
The tax rise could raise £39 billion over the next three years, helping to reduce NHS backlogs which have been exacerbated by the coronavirus crisis.
The extra cash raised could reduce waiting times and deliver millions more scans, tests and operations.
– Who does it apply to and how will the increase be taken?
If you are employed, this will come out of your wages before you are paid and the contributions will show in your payslip. Self-employed people pay national insurance depending on their profits and employers also pay NI contributions.
How else are households being squeezed?
This month has been dubbed ‘awful April’ by some, as households are dealing with multiple pressures from soaring living costs.
The NI rise comes on top of a 54% increase to Ofgem’s price cap and increases to council tax and water bills, mortgages, rents, food and transport costs.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: ‘Awful April is just the beginning of an incredibly tough few months…
‘The real pain of the national insurance hike will be felt on payday, at the end of the month.
‘At that point, we’ll be reeling from the impact of higher energy bills, council tax, water bills, fuel costs – and we’ll have to manage it all on a smaller pay packet. It’s a terrible time to hike taxes.’
Why will people particularly feel the pinch from the NI change in the next few months?
Employees currently pay national insurance on annual earnings above £9,880, but from July the threshold will increase to £12,570.
Ms Coles said the rise in the NI threshold will help combat the cost of the increase for lower and average earners.
But she said: ‘It doesn’t actually affect pay packets until the end of July.’
She continued: ‘In the intervening months, the threshold will be just £9,880, and the 1.25 percentage point rise will leave someone earning £20,000 paying £130 more a year, someone on £30,000 will pay £255 more, and someone earning £50,000 will pay £505 more a year.
‘And while 1.25 percentage points doesn’t sound like much of an uplift, in reality it will mean someone on an average wage will pay 10% more.’
Is there anything people can do to combat the impacts of the NI hike?
Salary sacrifice schemes allow employers to reduce an employee’s salary and pay the equivalent amount into a non-cash benefit, such as pension contributions or a cycle-to-work scheme.
Adrian Lowery, personal finance expert at investing platform Bestinvest, said: ‘An employer could agree to contribute a greater proportion of your salary into your workplace pension, in lieu of pay.
‘While pension contributions always benefit from income tax relief, if this system is used then national insurance relief is also obtained.’
He said there are downsides, however, to reducing your salary, such as decreased mortgage affordability.
Myron Jobson, senior personal finance analyst at interactive investor, warned: ‘A lower salary can affect entitlements such as maternity/paternity pay, mortgage applications based on one’s income, and some state allowances.
‘As such, people should always consider how such benefits could impact their finances more broadly.’