Charity warns lower income households could spend half of income on energy

Soaring energy prices could leave the lowest income families spending half their money on bills, according to a leading poverty charity.

The Joseph Rowntree Foundation (JRF) has called for government support to prevent households falling into debt due to the ongoing energy crisis. They calculated that if gas and electricity costs rise as predicted, families on middle incomes would be spending 6% on bills, whereas lower income, single-parent households would be spending 54%. 

Speaking on the figures, Katie Schmeucker, the deputy head of partnerships and policies at the JRF said: “The reality for many families is that too many children know the constant struggle of poverty. The fact that more children are in poverty and sinking deeper into poverty should shame us all.

“The case for targeted support to help people on the lowest incomes could not be clearer. But this must go hand in hand with urgent action to strengthen our social security system, which was woefully inadequate even before living costs began to rise.”

April will see the much talked about review of the energy price cap, a figure set by industry regulator Ofgem, limiting how much providers can charge customers. 

It is adjusted twice a year to reflect market conditions, and, due to skyrocketing wholesale prices, is expected to rise considerably. Current estimates indicate that it will increase by around 45%, which would add an extra £600 onto the average household's annual energy bills. 

Responding to the JRF report, a government spokesperson said: “We recognise the pressures people are facing on their household bills, which is why we have taken decisive steps to support them. The energy price cap has been protecting around 15m households from high global gas prices. We are also supporting vulnerable and low-income households with the cost of fuel bills through schemes such as the warm home discount and our £500m household support fund.”

JRF are not the first people to ask for government support in mitigating these price hikes. Leading industry figures such as Octopus boss Greg Jackson and Centrica CEO Chris O’Shea have called for support for energy providers. This in turn will help them to lessen the financial blow facing millions of Brits. 

On top of rising energy bills, lower income households are being faced with a National Insurance Hike combined with a cut to Universal Credit. There have been increasing calls to reverse both these changes, with fears that 2022 could see a cost of living crisis that would drive millions of families into poverty.