Nearly one third of UK households will struggle with energy bills

With fuel prices in the UK set to rise on April 1, 2022, new economic projections find that nearly one third of households will struggle pay energy bills

The Resolution Foundation report, Higher and Higher, suggests that immediate Government intervention is necessary to prevent 27% of English households from entering the reality of “fuel stress.”

Fuel stress is when a person spends over 10% of their household budget on energy, which can put significant pressure on food budgets, emergency health costs, and the cost of living as a whole.

Writing in the report, Resolution Foundation economists said: “The primary Government response should be lessening the impact of high energy costs on low-income households – for whom energy costs take up three times as much of household budgets as higher-income households, and who will be less able to shoulder additional spending.”

Right now, economists predict that the average fuel bill will rise from £1,277 to roughly £2,000 per year.

How can the energy bill crisis be reversed?

The report recommends a handful of immediate policy changes to preserve quality of life for those experiencing fuel stress.

• The existing £140 rebate being increased by £300, accounting for the scale of bill increases;
• Eligibility increased to the 8.5 million households in receipt of either Pension Credit or working-age benefits, with automatic payments available to all;
• An additional discount being implemented this Spring or Summer, outside of the normal winter payments;
• And the cost of the additional payment being taxpayer funded instead of paid for via the bills of non-recipients, as is the status quo.

When it comes to the future price shocks, there are more deep-rooted issues with the UK energy framework. This analysis highlights that the UK needs to “lessen reliance on imported fossil fuels” while also insulating low-income housing, where people are paying excessive amounts for heating due to bad insulation. The analysts also recommend speeding up plans for new nuclear power stations, which would provide the UK with a self-sufficient source of non-fossil fuel electricity.

“This isn’t a crisis that’s arriving in the spring”

The impact of rising energy bills in the UK will hit low-income households the hardest, with older individuals and those already experiencing fuel poverty poised to turn down their heating this year – despite how cold it is outside.

Writing in an open letter, Charity Director at Age UK Caroline Abrahams said: “This isn’t a crisis that’s arriving in the spring, it’s one that’s here already for many older people because their fear of unaffordable bills is driving them to not even try to stay adequately warm this winter.

“The Government must intervene swiftly and decisively to protect older people from their own stoicism and self-sacrifice. Every day that the Government sits on its hands, it increases the risks to older people’s health from living in a cold home.”