Families Face “Perfect Storm” This Autumn With Energy Bills Rising As Furlough Ends And Universal Credit Uplift Ditched
A record high in wholesale gas prices has led to the energy price cap set to go up for millions in October (Alamy)
This autumn could see a “perfect storm” for families as energy bills are set to jump by £150 at the same time as the furlough scheme finishes and the £20 Universal Credit uplift ends.
Citizens Advice say the “inevitable consequence” of the energy price cap increase announced this morning is more households falling into debt.
The regulator Ofgem said for 15 million UK homes bills will go up by at least £139 from October due to a rise of more than 50% in wholesale energy costs over the last six months, with gas prices hitting a record high.
Customers on default tariffs paying by direct debit will see the sharpest jump in prices since the cap was introduced, taking average annual bills to £1,277, while pre-payment customers will see costs rise by £153, from £1,156 to £,1309.
In response James Plunkett of Citizens Advice said: "This price hike could lead to a perfect storm for families this autumn, hitting people at the same time as a Universal Credit cut and the end of furlough.
"It's particularly worrying given families on Universal Credit are far more likely to already be in energy debt.
"With bills rising and incomes falling, many families will find it hard to escape. For many, debt will be the inevitable consequence.
"It all adds to the growing case to rethink the government's planned cut to Universal Credit and keep this lifeline which has been vital to keeping so many afloat."
Gary Smith, general secretary of the GMB union, said: "This is further evidence of the UK's increasingly shambolic energy and industrial policies, piling pressure on the poorest households while increasing our dependence on energy imports.
"That's a recipe for failure, not just for jobs and consumers, but also for the UK's security of supply and our net-zero ambitions.
"Ahead of Cop26, this should be the moment where the Government starts taking its responsibilities seriously in tackling the climate crisis."
Explaining the decision, Ofgem chief executive Jonathan Brearley said: "Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.
"The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.
"If you're struggling to pay your bill you can get in touch with your supplier to access the help that's available and if possible, shop around for a better deal.
"I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances."
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