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UK households will be £107 worse off from next month

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Millions of families could be more than £100 a month worse off from October as government support introduced during the pandemic is cut and utility bills increase.

Next month sees the £20 weekly uplift to Universal Credit withdrawn and the furlough scheme, which protected millions of jobs, ending, leading to potential redundancies or fewer hours worked.

At the same time, the energy price cap increases from 1 October, pushing the average bill for a household on a default tariff up by £139.

More than four million prepayment customers will see an even larger annual increase of £153 – or £13 a month.

Analysis by Royal London found families could be £107 a month worse off because of the changes.

Sarah Pennells, consumer finance specialist at Royal London, said: “The Covid-19 pandemic is perhaps the biggest life shock our society has experienced. As we continue to feel its effects, there’s never been a more urgent need to help those who are financially vulnerable.”

Recent research by Royal London found that 15.9 million UK adults are more financially vulnerable as a result of the Covid-19 pandemic.

Meanwhile, a survey by poverty charity Turn2Us found that over half (52 per cent) of people on Universal Credit will struggle to pay their bills when the cut comes into effect, with a further one in four people (25 per cent) unable to afford their rent or mortgage payments.

Thomas Lawson, chief executive of the charity, said: “The coming months will undoubtedly be very hard for individuals and families across the UK.

“The £20 per week cut to Universal Credit was already going to leave many families struggling to keep up with the cost of living. This, now combined with a sudden surge in energy prices, could spell disaster and plunge thousands more people into financial insecurity or even poverty; especially those of us whose financial resilience has been worn away by the pandemic.”

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