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Universal Credit households are four times more likely to face higher energy bills

Joanna Faith
Written By:
Joanna Faith

Families on Universal Credit are four times more likely than the wider population to face higher energy bills this autumn, according to The Resolution Foundation.

That’s because Universal Credit claimants are more likely to be on a pre-payment meter so will therefore see their bills shoot up by £153 when the prepayment energy price cap goes from £1,156 to £1,309 on 1 October.

This is the same month claimants will see their disposable income fall by around 5 per cent on average as the £20 a week uplift, introduced to help people struggling financially during the pandemic, comes to an end.

The Resolution Foundation said four in ten Universal Credit households are on a pre-payment meter, compared to just one in ten non-Universal Credit households.

It comes as Brits face soaring energy bills amid a surge in wholesale gas prices, which have risen 250 per cent since January and 70 per cent since last month.

Jonny Marshall, senior economist at the Resolution Foundation, said: “Low income families are facing a cost of living crunch on several fronts this autumn with energy bills rising alongside wider price increases, while Universal Credit is also due to be cut by £20 a week.

“Around 15 million households are set to face higher prices next week when the energy price cap is raised. This will be particularly acute for low income families on Universal Credit, who are four times as likely as the rest of the population to be on pre-payment meters, and therefore face even bigger increases to their bills.

“The Government must ensure that the cost and volatility of rising energy bills doesn’t fall entirely on households, for example by making support schemes like the Warm Homes Discount more widely available to households, and maintaining the £20 a week uplift to Universal Credit.

“In the longer term we can do more to protect low-and-middle-income households from volatile energy price shocks by ensuring the country is less reliant on imported fossil fuels with an extensive home efficiency retrofit scheme, while ramping up renewable energy generation and storage.”