How could cost of living support be introduced?
On April 1st 2022 under current plans, the energy price cap will increase by a predicted 57% to £2,000. This will raise annual energy bills to a level we haven’t seen in many of our lifetimes.
Click here to read the full report from Citizens Advice.
Citizens Advice is the energy consumer watchdog and leading welfare advice provider. The charity recommends four steps to deal with the challenge:
- Reduce the immediate financial pressure low-income households will feel in April. The best way of doing this quickly is through a one-off payment via the benefits system. The other possible mechanism is through energy bills. However, as we discuss below, there are significant challenges to this approach in the short term.
- Spread the cost of energy supplier failures over a longer period (2-3 years), rather than recovering the majority in 2022/3.
- Uprate benefits in line with current inflation. Offset it with lower increases in the following financial year (with the overall impact of the change being cost neutral).
- Start developing solutions for next Winter now as the crisis will last that long. Increase and extend the Winter 2022 Warm Home Discount. This will protect the lowest income households from the worst excesses of the price increases.
Adopting Citizens Advice’s proposals would provide savings and income boosts with £577 in 2022/23 or around £48/month. This would be a vital lifeline to households on the lowest incomes.
Click here to read the full report from Citizens Advice.
What is fuel poverty?
Fuel poverty used to be defined as spending more than 10% of household income on fuel. Many consumers can expect to be paying 33% after the increase. This affects people on a low income more because it leaves even less for food and other essentials.
What is energy stress?
It’s the feeling of not being able to cope and is caused when people have to take drastic measures. For instance, when a family has to live in one room to save money and choose between heating and eating.
With fuel issues, what cost of living support is there?
People can contact their energy suppliers to discuss spreading the cost.
You can also contact your local Citizens Advice group and ask them to do a benefits check. We will do a check to maximise your benefits to ensure you get everything you are able to get.
