Rising energy prices could plunge half a million people into fuel poverty, warn charities Business News

Nearly half a million Britons could be plunged into fuel poverty this winter after regulators raised the energy price cap by £ 139, charities have warned.

The End Fuel Poverty Coalition estimated that an additional 488,000 people could not afford to heat their homes, with vulnerable groups most likely to be affected.

Campaigners have aligned themselves to condemn the decision by energy regulator Ofgem which goes into effect on October 1, at the same time that unemployment is set to rise and a £ 20-a-week increase in universal credit ends.

The rise in energy prices, which applies to people on default tariffs, equates to a 12% increase in bills for about 15 million homes. This is the second increase in six months in the ad that adds to 9 percent

“This unprecedented increase in energy bills comes at the worst possible time for millions of homes across the country. It’s hard to say how devastating this news will be for people, ”said Simon Francis, coordinator of the End Fuel Poverty Coalition.

“Vulnerable customers and those who use prepayment meters who cannot change supplier and who will face a winter in abject energy poverty will be particularly affected,” he added.

Jonathan Marshall, senior economist at the Resolution Foundation, said households with the lowest incomes would see their incomes hit three times more than those with higher incomes.

“Combined with the planned end of the £ 20 per week increase in universal credit, which takes effect in October, and rising inflation, this risks leaving many of the poorest families in a much worse situation this winter, ”he said.

“Going forward, the government must spearhead a successful and permanent transition to cheaper renewable energy sources, ensuring that this transition takes place in a way that minimizes the impact on people. already in a situation of fuel poverty or at risk of falling into fuel poverty. “

Marshall urged ministers to maintain the uptick in universal credit and provide targeted support to families at risk of fuel poverty.

Around 2.4 million people are already thought to live in fuel poverty in the UK, according to government statistics which indicate that an average affected household would need £ 334 to properly heat and power their home.

Citizens Advice has warned of a “perfect storm” to hit families this winter as government financial support is withdrawn as energy prices rise.

“This is particularly concerning given that families with universal credit are much more likely to already be in energy debt,” said James Plunkett, executive director of Citizens Advice.

“With rising bills and falling incomes, many families will find it difficult to escape. For many, debt will be the inevitable consequence.

“This all adds up to growing arguments for rethinking the government’s planned cut in universal credit and maintaining this lifeline that has been vital to keeping so many afloat.”

Activists advised people to look for better deals before October 1, but said it was not a solution to the problem. “If everyone involved changed, the agreements would disappear to cover the costs and benefits of the suppliers,” said a spokesperson for Fuel Poverty Action.

“Finding a better deal is laborious and suppliers rely on those who not only lack money, but also time. Placing the onus on the victims to individually find a way out of rising prices is a false solution. Change must go beyond the redistribution of poverty.

“With thousands of people freezing to death each year, the current energy pricing system – with price caps – is not fit for purpose. As prices rise, a reduction in the carbon tax would help, but not solve this crisis. We need a new pricing framework, where the poorest do not pay higher tariffs than the rich. “

Fuel Poverty Action also called for well-insulated housing, more renewable energy, new heating systems, and wages and benefits that meet people’s costs.

“No special provision or consumer protection will prevent energy poverty from killing retirees and destroying childhoods. The pandemic has taught millions of people that real change cannot wait, ”the charity said.