Poor UK households may have to spend half their income on energy, says charity

Soaring energy bills could eat up more than half of some UK households’ incomes, a leading poverty charity has said, amid warnings that vulnerable people will be left unable to eat regularly or could even be at risk of death from the cold.

The Joseph Rowntree Foundation (JRF) said that while households across the board faced bill increases of 40% to 47% from April, there would be huge variations in the ability of families to cope.

Energy bills would amount to 6% of the average income of a middle-income family but 18% for a low-income family. This would rise to 25% for lone parents and couples without children, while single-adult households on low incomes could be forced to spend 54% of their income on gas and electricity when the new energy price cap comes in on 1 April, the JRF found.

“Rising energy prices will affect us all but our analysis shows they have the potential to devastate the budgets of families on the lowest incomes. The government cannot stand by and allow the rising cost of living to knock people off their feet,” said Katie Schmuecker, the deputy director of policy and partnerships at the JRF.

The warning came as one of the UK’s most respected financial advisers, Martin Lewis, said ministers must intervene urgently to help vulnerable people whose lives could be at risk.

Lewis, the founder of the consumer advice website MoneySavingExpert, said the government must provide billions of pounds in support to millions of poorer households who faced major financial stress and “heat or eat” decisions.

“We absolutely know we need a substantial increase in the billions of pounds funding to vulnerable people, and people on low incomes, or it is not an exaggeration to say some will have to choose between heating or eating, and that is not appropriate in one of the world’s richest economies and a civilised nation,” he told BBC Radio 4’s Today programme.

“What we can’t get away from is we are going to need to put money into the system or we are going to have an absolute, not a relative, an absolute poverty crisis in this country, with people really being unable to eat or dying because of the cold.”

JRF said the impact of energy costs would be especially harsh on families that have been trapped in “deep poverty” in recent years. About one in five children were in families classed as being on low incomes for three of the four years between 2016 and 2019, meaning for many, poverty was “all they have ever known”.

“Broadly speaking, there seems little prospect of reversing the trends since around 2012/13 of rising child poverty (which rose by four percentage points to almost a third of children by 2019/20) and rising pensioner poverty (which has risen by five percentage points to almost a fifth of pensioners by 2019/20),” the JRF report said.

A government spokesperson said: “We recognise the pressures people are facing on their household bills, which is why we have taken decisive steps to support them. The energy price cap has been protecting around 15m households from high global gas prices. We are also supporting vulnerable and low-income households with the cost of fuel bills through schemes such as the warm home discount and our £500m household support fund.

“Working families on universal credit are already seeing more money in their pockets, with an average of £1,000 more a year, and we’re increasing the living wage again in April. We will continue to look closely at the pressures facing people and what further measures might be needed on abating high energy costs.”