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More than 7 million people who are no longer eligible for energy support from next spring face fuel poverty if the average heat and light bill stays at £3,000, according to a report calling for more targeted help.
In his November Budget the chancellor, Jeremy Hunt, announced that the government’s Energy Price Guarantee (EPG) would rise from April to £3,000 a year for the typical household, and that the £400 help paid to all households this winter – regardless of income – would not be repeated. .
A report by the Social Market Foundation, along with fellow thinktanks Public First and Citizens Advice, questioned whether that trend is sustainable, given the millions of people it will leave struggling to pay their bills.
While Hunt said those on benefits, pensions and vulnerable groups would continue to be helped after next April, the budget offered no support for low-income earners earning above the benefit threshold.
The report’s authors found that 12 million households face emergency-level energy costs with bills at their current levels. Three-quarters of them receive welfare benefits or state pensions, meaning they are eligible for additional government energy support.
However, that leaves 3 million households with 7.2 million people who face paying more than 10% of their income on gas and electricity, and therefore live in fuel poverty.
More than 2 million UK households are already in debt on their electricity bills, which will be significantly higher in the spring.
“Politicians must implement long-term policies to provide targeted financial support for millions of households facing what could be a decade of painfully high energy bills,” the report says.
Its authors also argue that using state pensions with benefits to decide who gets help means that one in three of the richest 10% of households will receive government assistance.
Amy Norman, SMF Senior Researcher, said: “High energy prices may be the new normal, but our current energy policies are not set up to help people who could have painfully high bills in a decade. Our current approach means millions of people are missing out on the help they really need.
“Politicians of all parties must come together to develop effective long-term policies that help the people who need it most. That means developing new systems to identify people in need and get them help: Today the public sector lacks the tools to ensure money is going to the right places to help with energy bills.
Dame Claire Moriarty, chief executive of Citizens Advice, said: “In the long term, we must ensure that people can keep their homes warm and keep their bills down. The best way to do that is to insulate cold and poor houses.”
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