Five million households face an energy budget crisis as bills soar overnight Business News

Five million households will be forced to spend at least 10% of their budget on energy bills after Friday’s price cap hike, according to the latest analysis.

The prediction comes as the bill limit increases by 54%, adding an average of £693 a year to the cost for those on default rates.

A number of major energy supplier websites crashed on Thursday as customers rushed to submit meter readings ahead of the increase. Users reported being unable to access the websites of energy giants such as British Gas, SSE, E.ON and EDF.

Price hikes will double the number of ‘energy stressed’ households – a term for those who spend 10% or more of their income after housing costs on energy bills – overnight from 2.5 to 5 million in England alone, according to the Resolution Foundation think tank. The numbers explain Chancellor Rishi Sunak’s recent intervention to mitigate the impact.

With the price cap set to rise sharply again later this year, the think tank said an additional 2.5million households could fall into ‘energy stress’ in the fall unless additional support is provided. , bringing the total to 7.5 million. This is based on an estimated £500 price cap increase on October 1.

Shadow climate change secretary Ed Miliband criticized the prime minister and Sunak for not doing more to help. “On a day when energy bills rise to record levels for millions of families, it is shameful that Boris Johnson and Rishi Sunak refuse to go further to support the people of Britain facing a cost of living crisis,” did he declare.

“It tells you everything you need to know about this government supporting it while workers, families and retirees suffer.”

At the start of February, Mr Sunak announced a support package worth £350 – via a council tax refund of £150 and a refundable initial rebate of £200 – for each of “the vast majority of households to reduce the “sting” of the rise.

But some Tory MPs are increasingly concerned that the chancellor’s lack of new measures for poorer households could hurt local elections in May.

“There’s such a deep problem with sounding deaf when you’re trying to drum up support,” said a senior Tory MP. “People are starting to see their neighbors tightening their belts and demand is building on local charities,” they added.

‘The spring declaration has not helped those most in need,’ said another Tory MP The Independent. “He also failed to cut taxes. The fuel tax cut has also been swallowed up, judging by the experience of most drivers. Nobody feels like a winner when they try to sell high taxes and low [financial] Support.”

April 1 is the peak of the “acute” cost of living wave, according to the Resolution Foundation, as rising price caps combine with other cost pressures in the economy to push inflation to high. its highest level in 40 years.

Mr Sunak’s efforts to ease the economic blow of energy bills via council tax refunds will be missed by more than half a million poorest households, he has been warned.

Jonathan Marshall, senior economist at the Resolution Foundation, said: “A further rise in energy bills this fall is accelerating the need for more immediate support, as well as a clear, long-term strategy to improve insulation. houses, increase the production of renewable and nuclear electricity. , and reforming energy markets so that family energy bills are less dependent on global gas prices.

Johnson told MPs on March 9 that he would present an energy independence plan for this country over the next few days. However, an energy strategy has yet to emerge and it is unclear when it will be released. The Treasury would have weathered some of the long-term cost implications.

Ofgem, which regulates the gas and electricity markets in Britain, announced on February 3 that the energy price cap – designed to prevent companies from making excessive profits – will increase to around 22 million customers from April 1.

The regulator calculates this means the average household on default tariffs paying by direct debit will see an increase of £693 to £1,971 a year for gas and electricity. There will be a £708 increase from £1,309 to £2,017 per year for the average prepaid customer. Ofgem said the increase is “driven by a record rise in global gas prices over the past six months”.

Freezing temperatures are set to hit as the price cap hike kicks in. Met Office meteorologist Tom Morgan said: ‘People are going to wake up [on Friday] temperatures just below zero, -1 or -2 in most of England and Wales for example, but in the afternoon we will see temperatures of 8 or 9C.

He added: “Once again on Friday evening we will see temperatures drop well below freezing across the UK and into the early hours of Saturday morning possibly down to -4, -5C even in the south of England.”

The government is “without doubt” that the rise…

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This notice was published: 2022-03-31 23:00:14

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