More than 7 million people who no longer qualify for energy support from next spring face years in fuel poverty if average heat and light bills remain at £3,000, according to a report calling for more targeted help.
In his November budget the chancellor, Jeremy Hunt, announced that the government’s energy price guarantee (EPG) would rise from April to £3,000 a year for the typical home, and the £400 help paid to all households this winter – regardless of income – would not be repeated.
The report from the Social Market Foundation, in conjunction with fellow thinktank Public First and Citizens Advice, questioned whether that stance is sustainable, given the millions of people it will leave struggling to pay their bills.
While Hunt said those on benefits, pensions and in vulnerable groups would continue to be helped after next April, the budget offered no support to those who are on lower incomes who are earning just above the benefits threshold.
The authors of the report found that 12 million households face crisis-level energy costs with bills at their current levels. Three-quarters of them receive welfare benefits or the state pension, meaning they qualify for additional government energy support.
However, that leaves 3 million households containing 7.2 million people who face paying more than 10% of their income on gas and electricity, and thereby living in fuel poverty.
More than 2 million UK households are already in debt on their electricity bills, a number that will be significantly higher come the spring.
“Politicians must put in place long-term policies to provide targeted financial support for millions of households for what could be a decade of painfully high energy bills,’’ the report says.
Its authors also argue that using the state pension alongside benefits to decide who gets help means that around one-in-three households in the richest 10% will receive government support.
Amy Norman, SMF senior researcher, said: “High energy prices could be the new normal, but our current energy policies aren’t set up to help people with what could be a decade of painfully high bills. Our current approach means millions of people are missing out on the help they really need.
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“Politicians of all parties should come together to develop workable long-term policies that get help to the people who need it most. That means developing new systems to identify people in need and get help to them: the public sector today simply lacks the tools needed to make sure money to help with energy bills is going to the right places.”
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Longer term, we must ensure people can keep their homes warm and their bills down. The best way of doing that is by insulating cold and draughty houses.”