The number of households suffering from “fuel stress” is set to treble to 6.3 million overnight when the new energy price cap comes in on 1 April, according to a leading household.
Fuel stress – those speeding at least ten per cent of their family budgets on energy bills – will no longer be limited to the poorest households, a new Resolution Foundation study found.
Low- and middle-income families will also find it hard to cope as a greater share of family incomes are spent on energy.
The forecast adds to calls for the government to take action to avert a cost-of-living catastrophe after global energy market prices surged to record highs.
Research reveals that nine per cent of English households are currently experiencing fuel stress, but that figure is expected to leap to 27 per cent when the energy cap rises to around £2,000 a year in April – an increase of more than 50 per cent.
Levels of fuel stress are expected to be the highest in the north-east and West Midlands (33 per cent and 32 per cent respectively), among pensioner households (38 per cent), those living in local authority housing (35 per cent) and people in poorly-insulated homes.
Jonny Marshall, senior economist at the Resolution Foundation, said: “Fuel stress levels are particularly high among pensioner households and those in poorly insulated homes – a stark reminder of the need to modernise Britain’s leaky housing stock and curb national dependency on gas for power and heating.”
The thinktank is calling on ministers to intervene, and said the most effective way to support lower-income families is through the benefits system with a faster-than-planned uprating of benefits in April.
Alternatives include an additional payment based on the warm homes discount, with the Resolution Foundation recommending a raising of the £140 payment by at least £300.
It also called for cuts to everyone else’s energy bills by temporarily transferring social and environmental levies from bills to general taxation. That would cut average bills by around £245 and reduce the number of families in fuel stress by roughly 1.7 million.
“While not cheap at £7.3bn, this plan is affordable, and by cutting bills by up to £545 would help prevent the upcoming rise in energy bills turning into a cost of living catastrophe for millions of families,” Marshall told the Guardian.
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