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Steep rise in people seeking help for energy debts

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Written by: Emma Lunn
14/01/2022
Citizens Advice says its advisers have seen a 40% increase in people seeking help on fuel debts as soaring prices leave energy bills as a proportion of benefits at a ‘generational high’.

The charity is calling on the government to provide a one-off grant this April to support families on the lowest incomes with their energy bills.

It warns that further rises to the energy price cap – expected in April – will tip many more households into hardship. 

Citizens Advice analysed energy tariff data against historic benefits levels going back two decades. It found that April’s estimated price cap rise will leave a single adult spending a third (33%) of their standard allowance – the basic rate of Universal Credit – on energy bills. 

This could rise to 37% of the standard allowance in October. The figures represent a historic high compared to 2002 levels which saw 14% of basic rate benefits spent on energy bills.

Up to 2.1 million single adults without children currently claim this basic rate of Universal Credit. The charity’s modelling excludes other benefit payments, including for housing costs. 

Citizens Advice says it is receiving increasing numbers of enquiries from people facing  ‘desperate choices’ because they are unable to keep pace with the soaring cost of living.

In the last three months of 2021 frontline staff at Citizens Advice helped one person every 40 seconds with a fuel debt issue – 40% more than compared to the same period in 2020.

The charity’s page on grants and benefits to help people pay their energy bills is now the second most viewed page on its website, the most viewed it has ever been.

In December 2021 the charity’s consumer service supported double the number of people who’d run out of money to top up their prepayment meter, compared to the same time last year.

The energy price cap, which sets default tariffs, is estimated to rise by £700 in April – more than a 50% increase. Around 11 million households on default tariffs will see their bills increase straight away. 

Citizens Advice estimates an additional 600,000 customers currently on cheaper fixed rate tariffs will see their bills rise by a further £150 when their fixed rates end in the summer. The price cap will go up again by an estimated £200 in October.

The charity is urging the government to bring forward a package of support to help people with their bills, including a one-off ‘Energy Support Grant’ to be paid through the benefits system this April and an expanded Warm Home Discount scheme.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “These figures confirm what we’re already seeing through our frontline services. Energy costs are eating into budgets and it’s families on the lowest incomes who’re feeling the biggest squeeze. 

“With further hikes set to push bills to a generational high, disaster is on the horizon if the government doesn’t act. The single best way of helping low-income families weather April’s price cap rise is a one-off payment through the benefits system. 

“To help avoid us being in the same situation next winter when temperatures drop and bills soar again, the government must also expand the Warm Home Discount.”

Other organisations that have called for government action on the energy crisis include Age UK and National Energy Action

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