Energy bills ‘will hit 120% of income for worst-hit adults’ amid call for action NOW
Families on low incomes face paying four-and-a-half times more for energy from next year – with the risk of children going hungry “very real”, a charity warns today.
The Joseph Rowntree Foundation (JRF) said that electricity and gas could soon become a luxury only the wealthy can afford as bills rocket – and said government action must be immediate.
Analysis by the charity found some adults could see their finances wiped out by bills that make up 120% of their income.
Earlier today Boris Johnson said that further support will be announced by the government – but not until next month, when he leaves office.
Leadership favourite Liz Truss has pledged an emergency budget, but has not committed to what this will involve – and her allies have admitted this could take weeks to pass.
Bleak analysis found that many households will be put “in an impossible situation”.
(
PA)
The JRF sound that the poorest fifth of families – with an average income of £11,600 after taxes and paying for housing – will pay an average of 46% of their income on energy bills.
The figure will be lower for middle income families – with average incomes of £31,400 – for who the figure will be 19%.
And the energy bill for a low-income single adult household is forecast to exceed the entirety of their income after housing costs.
The JRF said: “This is a truly impossible situation leaving them having to cut down on energy use even to pay their bill and having no money whatsoever left over for food or other essentials.
“That means in order to pay energy bills alone, they would have to use their entire income and find even more money. They would almost certainly become destitute as a result.”
(
PA)
The charity said couples without children and lone parents on low incomes will hand over almost two thirds of their income just to keep the lights on or cook dinner every day.
For pensioners in the same financial situation, energy will make up around 40% of their disposable income.
Peter Matejic, Chief Analyst at the Joseph Rowntree Foundation, said: “The Government devised its support package based on a previous energy price forecast made obsolete by today’s extraordinary announcement.
“With the price cap very likely to increase significantly and forecast to remain high well throughout next year, our analysis shows it is a sheer fantasy to think struggling families can pay these stratospheric energy bills without further Government intervention on a significant scale.”
He continued: “In all my years as an analyst, I haven’t double-checked a piece of analysis as much as this one because it is so staggering, it feels incorrect.
(
Getty Images/iStockphoto)
“It is impossible to think a care worker or a shop assistant will have to scramble to find hundreds more pounds to pay for their heating or that the entirety of someone’s income for a whole year will be less than their energy bill. But that’s what these figures suggest will be the case unless significant further steps are taken quickly.
“Ministers have a choice about who shoulders most of the burden – families, businesses or the public finances. Whoever occupies number 10 next will be remembered for who they protect – they must make sure energy doesn’t become a luxury only the wealthy can afford.”
Mr Matejic said the government has no time to waste in putting a response together.
He said: “The Government must immediately respond with a comprehensive emergency package to cover the period of these extreme price rises, just as they did so creatively and quickly with furlough during the early stages of the pandemic.”
Earlier today Mr Johnson said more measures will be announced next month, but the government has yet to provide any clarity on what to expect as the crisis deepens.
He said this morning: “Of course we could see this coming, that’s why we put the steps in place that we already have.
“Although there will be more announcements coming next month, you shouldn’t forget the pipeline of cash stretching out throughout the autumn.”
He said that eight million people at most risk will receive an additional £650, while in November pensioners will be given £300 and £150 of support is on the way for people entitled to disability benefits.
Mr Johnson continued: “There’s a pipeline of cash coming through the next few months, but that’s clearly going to be augmented by extra cash that the government is plainly going to be announcing in September.”
Throughout her leadership campaign, Ms Truss has repeatedly dismissed direct support, claiming that she doesn’t support “handouts”.
But it is clear her economic plan, which focuses on tax cuts, will do precious little to help those most in need, and her rival Rishi Sunak warns that it could drive millions into destitution.
