UK energy bills – six ways to reduce the impact of soaring prices
The UK government has been urged to take further action to alleviate the impact of soaring energy prices, and there are a number of measures it could take.
Any rescue package would need to be swift and extensive to prevent households being plunged into poverty this winter as home energy prices surge. Ministers will also need to dig deep to prevent more businesses hit by rising energy costs from defaulting on loans and declaring themselves bankrupt.
The government’s energy bills support scheme provides a £400 discount on bills in October for every household, a £650 means-tested one-off payment to 8m low-income households, £150 for those on disability benefits and £300 for pensioners. This was designed when the forecast for the October price cap was £2,800.
Most economic thinktanks have urged the government to focus on boosting the incomes of low-income families to meet the higher costs of energy from the rise in the cap in October and January, possibly to as high as £4,200 a year.
The International Monetary Fund has criticised European countries, including the UK, for offering some subsidies to all income groups rather than targeting cash at those most vulnerable to fuel poverty.
Earlier this month, the National Institute of Economic and Social Research said that “any fiscal loosening would be better directed to universal credit”, which it said should rise by £25 a week for at least six months from October, supporting the 5.9 million claimants. The energy grant should also rise from £400 to £600 for 11m low-income households, it said.
About half of the current 9.4% inflation rate can be accounted for by energy cost increases, according to the Bank of England.
About 23m households have their domestic energy bill governed by the
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