I DON’T like the idea of being in debt. In fact, I’ve gone out of my way to be debt free.

There was a time, a couple of decades ago that wasn’t the case. I had a mortgage, a couple of young children at home, a poorly paying job and my wife could only get casual work so things were pretty tough.

Bizarrely, I was able to get credit cards without too much trouble. I think in the end I had five or six and needless to say, our family finances rapidly headed towards becoming a classic case study for Money Saving Expert Martin Lewis. I have to confess it was a struggle.

Gradually, over many years, things started to improve. The kids got jobs after university and moved into places of their own. I was promoted and my wife got a full-time job.

But we still had an eye-watering amount of debt. So, inspired by Martin Lewis, we sat down and made a five-year plan.

Our sole aim was to pay off our debts so discretionary spending was cut right back. There were no luxuries, no trips to the pub or meals out. We didn’t buy anything unless we absolutely needed it. We categorised our debts according to interest rates and paid off the most expensive first, only making the minimum payments on the rest.

It was a joyous moment when I took a pair of scissors to that first and most expensive card. It seemed like a real milestone and freed up more money to pay off even more of our debts. And as each credit card was cleared the process seemed to speed up and our ‘discretionary’ debt was finally cleared. We were even able to pay off our mortgage early.

And for the first time in a long time we were able to save.

But the experience did leave psychological scars. I now have an almost pathological aversion to being in debt. It reminds me too much to the ‘bad old days’.

Which brings us to today, well next October to be precise. Because it very much looks like absolutely everyone who pays an electricity bill will be forced to take a £200 loan whether or not they want one.

The reason is that millions of households face a 54 per cent energy bill hike from April 1 after the regulator Ofgem lifted the cap on default tariffs to the equivalent of just under £2,000 a year for an average user.

To try to take the sting out of the price rise, Chancellor Rishi Sunak has come up with a scheme where every household will be loaned £200 which will be discounted off their bills in October and will be paid back at £40 a year added to energy bills for five years from April 2023.

I don’t want that loan for all the reasons I stated above but there is no provision within the scheme for people to decline it.

You get the loan and have to pay it back whether or not you want it.

If that seems unfair, there’s worse to come hidden away in the small print. You may end up paying back the loan even if you never received it in the first place.

Stick with me on this. Say you’ve got a couple of grown-up kids living with you in October when the loans are paid out, you get the discount but they don’t.

If they then leave and get homes of their own, the £40 repayments will be still added to their power bills.

And it can get really messy for people who are in rented accommodation who subsequently buy a property. It may be it’s the landlord who gets the £200 loan discount but you will still have to pay it back.

Doesn’t seem fair, does it? But what seems really wrong is that all those politicians who campaigned for Brexit explicitly told us we would have lower energy bills if we left the EU because the Government could scrap the five per cent VAT levied on power bills.

So why hasn’t the Government done that? Was it just another Leave lie along with £350m a week to the NHS?

And so much for the EU stopping us from taking back control. While our bills are going up 54 per cent in April, the French government has capped the energy price rise at just four per cent after ordering the majority state owned EDF to take a massive cut to its profits.

Yet Sunak has explicitly ruled out a windfall tax on the power companies that are making massive profits while still paying out huge dividends to shareholders.

It looks like someone has got the Brexit sunlit uplands, but it’s certainly not us.

Fly