Households will be left in “deep peril” and older people will be “badly shaken” by the rise in energy bills, charities have warned.
On Thursday, energy regulator Ofgem announced prices are set to soar by 54% for 22 million households from the beginning of April, adding £693 to the annual costs of a typical household.
Later in the day, Chancellor Rishi Sunnak announced a £9bn package, including a one-off repayable £200 discount and a £150 rebate on council tax bills, and £144m to councils to support vulnerable households amid the surging energy prices.
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Sunak: ‘This is a difficult time’
However, the government’s plan has been met with criticism with one fuel poverty charity describing it as “woefully inadequate”.
‘We need deep, targeted support”
National Energy Action (NEA) said the increases will mean the cost of heating an average home will have doubled in 18 months while numbers in fuel poverty will soar from four million to 6.5 million households across the UK in just six.
“These energy crisis measures are woefully inadequate and will leave those on the lowest incomes and in the least efficient homes in deep peril, NEA chief executive Adam Scorer said.
“We needed deep, targeted support for the most vulnerable. We have shallow, broad measures for all. That simply does not work.”
“The rebates on bills and council tax are not sufficiently targeted, too small, and too complex,” he added.
“We expect the government will have no choice but to return to the issue of spiralling fuel poverty and another price rise later this year. By then they’ll be playing catch-up and great harm will already have been done.”
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Why the price cap needs to rise
According to an analysis by the Joseph Rowntree Foundation, even after the deferral scheme for energy bills and the council tax discount are taken into account, families on low incomes will spend on average 16% of their incomes after housing costs on energy bills.
This compares to 5% for middle-income families.
“Already people are not spending money because they do not have money to spend,” Newham resident, Naveem Choudry told Sky News.
“It has already affected businesses and plus energy bills going up, which has very badly affected business. People are already scared because they don’t have no money, they have no future.”
‘We are gonna have to start considering using food banks’
For low-income families with children, the measures announced by the government will mitigate just 36% of the increase in their bills on average in comparison to 59% for low-income single-adult households, analysis by the Joseph Rowntree Foundation found.
A 47-year-old mother said the rise in fuel prices may mean she and her family have to start using food banks.
Melanie, who lives with her partner and six-year-old daughter in Flintshire, told the PA news agency she is “absolutely horrified” by the 54% increase in the price cap.
“If things keep rising the way they are, we’re going to be in a terrible predicament where yeah, we are gonna have to start considering using food banks,” she said.
“We pride ourselves on every time we do a food shop, we buy at least one thing for the food bank – the tables are going to turn where we’re having to possibly ask them for help after April.”
‘It is disgusting’ – Age UK calls for more help
Meanwhile, Age UK has urged the government to urgently rethink their plan, warning older people on low and modest incomes are “bitterly disappointed”.
“With average energy bills now set to rise by a whopping £693 per year – and almost certain to increase further in a few months’ time – the support the chancellor has announced simply does not go far enough,” Caroline Abrahams, charity director at Age UK, said.
“It will still leave many of these pensioners facing energy costs surging by an extra several hundred pounds that they cannot afford to pay.”
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Why are your bills going up?
Read more: What is the energy price cap and why will bills rise so sharply?
She added: “Tough and stoical though they typically are, many older people will be badly shaken by the news they are hearing today.
“There’s no doubt it will lead to many more turning their heating down or off altogether because they will know these price surges and the chancellor’s inadequate response signals a crisis in their personal finances, with no end apparently in sight.”
One woman, 85-year-old Pauline Thorley, told Sky News: “I think it’s disgusting… what can we do about it? Nothing.
Asked if the energy rise makes her worried about her own bills, she said: “It does, I’m on my own but I’ve still got the same heating as everybody else.”