Energy bill increase is a 'crisis' for disabled says Martin Lewis
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The Resolution Foundation is warning that 2.5 million households in England are set to fall into “fuel stress” as a result of the rise to the energy price cap yesterday (April 1), which will see bills rise by £693 this year. Another 2.5 million are forecast to be at risk if the price cap is raised even further to £2,500 in October 2022. Research conducted by the think tank has highlighted that low-income families will be the most adversely affected by the hike to energy bills but many will be unable to access vital support to mitigate the impact.
As it stands, the poorest fifth of households are predicted to spend over twice as much of their family budgets on energy bills as the richest fifth in the country.
Furthermore, Britons who live poorly insulated homes, which have an energy efficiency rating of E are set to see their prices go up more than most.
These households will see their energy bills become £320 a year higher than those in similarly-sized C-rated homes.
If current forecasts remain the same, this “efficiency gap” between different households could get as high as £380.
Introduced to address the energy crisis, the council tax rebate gives households in bands to A to D a £150 discount on their bill. Overall, the people who are in these council tax brackets make up 80 percent of the UK’s population.
However, those who are not in tax brackets A to D will be unable to receive this means of support. For example, one fifth of the poorest households in London are in bands E to H so can not get the £150 discount.
On top of this, landlords usually pay their tenants’ council tax and are not legally required to pass the rebate onto whoever is living in the property. Due to this, those who are renting rooms or properties may have to pay the higher energy bills.
In light of this, the Resolution Foundation is calling for more targeted support to address the potential devastating impact the increase to energy bills will have on those who are low income.
After yesterday’s bill increase, Jonathan Marshall, the senior economist at the Resolution Foundation, said: “Today’s energy price cap rise will see the number of households experiencing fuel stress double to five million.
“With the price cap expected to rise sharply again on October 1, a further 2.5 million households could fall into fuel stress this autumn, unless more support is provided.
“There are no easy ways to protect people from rising bills in the current climate. But with many of the poorest households missing out on the Council Tax rebate, this scheme should be used to supplement, rather than replace, support via the benefit system, which is better equipped to target lower-income families.
“Another increase in energy bills this autumn hastens the need for more immediate support, as well as a clear, long-term strategy for improving home insulation, ramping up renewable and nuclear electricity generation, and reforming energy markets so that families’ energy bills are less dependent on global gas prices.”
As well as the Resolution Foundation’s warning, charities such as Age UK have downed the alarm that many older households will not be entitled to the council tax rebate
Of this group, 21 percent are either living in poverty or claiming income-related benefit support from the Department for Work and Pensions (DWP), according to the charity.
Caroline Abrahams, Charity Director at Age UK, explained: “The Chancellor paused the triple lock guarantee to the state pension this year on the basis that the increase in average earnings at the time was a temporary blip due to the pandemic.
“Since then, prices have soared so next month’s planned 3.1 percent increase is only a drop in the ocean compared to the sharp rises in energy and other costs confronting us all.
“As things stand, at Age UK we simply cannot see how older people who have no other sources of income besides their state pension and benefits will be able to pay the higher prices they face.
“Those with few if any savings are out of options and their only hope now is that the Government will recognise their difficulties and extend a helping hand.”
A spokesperson for the the Department for Levelling Up, Housing and Communities said: “Direct debit is the quickest and easiest way to pay council tax, and the best way for most people to get the rebate.
“Eligible households who don’t pay their council tax by direct debit will be invited to make a claim. Councils will be reimbursed for their administration costs.”
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