500,000 households forced into fuel poverty in ‘perfect storm’ of gas price hikes and Universal Credit cut

Rising energy costs and the Universal Credit cut is expected to force thousands into financial hardship this winter

More than 500,000 more households could be forced into fuel poverty this winter due to soaring wholesale gas prices, which has sent energy bills rising.

The average household faces a £178 annual hike to bills when the price cap increases to a record-high of £1,277 on 1 October.

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The rising energy costs come as the government prepares to withdraw the £20 per week Universal Credit uplift on 6 October, which could force as many as 1.5 million people into hardship in the coming months.

Skyrocketing energy bills, coupled with the Universal Credit cut and the ending of the government’s furlough scheme on Thursday (30 September) has been described as the “perfect storm for homelessness” by housing charity Shelter, with those on low incomes to be the worst affected.

‘A choice between eating and heating’

The financial pressures faced by households this winter could force people to make the difficult choice between heating their homes or buying food, experts have warned.

Mike Foster, CEO of the Energies and Utilities Alliance (EUA) warned that seven million people are already living in fuel poverty and the impending price rises could have devastating effects for thousands more.

Speaking to NationalWorld, Mr Foster said: “There were 3.5 million households - approximately seven million people - living in fuel poverty before the recent rise in energy bills.

“The increase in the price cap of £150 will see an estimated 500,000 more households enter fuel poverty, and expected price increases next year could double that number.

“According to our research, two-thirds of consumers genuinely fear being able to heat their homes this winter.

“Sadly we will see people forced to make that choice between eating and heating.

“The price cap will offer some protection this winter, but that is increasingly hitting hard-pressed families who typically spend a greater share of their income on energy bills than the better-off in our communities.

“With cuts to Universal Credit also hitting the same group, it will be a miserable 2021 for many.”

Food banks warn of surge in demand

The impending cut to Universal Credit has left as many as 600,000 working claimants in fear of being unable to afford food and other basic necessities after their income is reduced, Citizens Advice has warned.

Charity Feedo Needo, which provides food to vulnerable communities in Birmingham, Bradford, Manchester and London, has said it has already seen a surge in people using food banks due to rising energy bills.

Rafa Ahmed, senior project executive at the charity, said: “We are preparing for a very busy winter ahead.

“Many young families and individuals living on the breadline are worried they may not be able to maintain their living standards and may have to use a food bank for the first time in their lives.

“Across our branches we are preparing ourselves that more people will need us more than ever, especially after the unemployment rate is expected to rise after furlough ends.

“We understand how hard the past year and a half has been and we want to help as many people as possible.

“In this past year, we have supported over 50,000 vulnerable members of our community and provided over 15,000 food parcels to the most needy, and we anticipate an increase in these stats over the course of the coming few months.”

Rafa Ahmed, centre, has warned many people may have to use a food bank for the first time in their lives (Photo: Feedo Needo)

The rise in people seeking support has also been felt by fellow food charity, Feeding Britain, with national director Andrew Forsey explaining that the Universal Credit withdrawal has been a key driver in driving individuals to food banks.

Mr Forsey said: “It’s almost impossible to think of a policy that’s more certain to lengthen the queues outside food banks, than this one.

“After six months of broadly stable levels of need, we have recently begun to register an increase in the numbers of people seeking help.”

Asked whether this winter will be more difficult on the vulnerable and low earners, Mr Forsey added: “Sadly, this looks almost inevitable.

“Not least because a cocktail of misery is about to be served to hard-up Brits with major cuts to government support schemes, coupled with the rising costs of food and fuel, all of which will stretch household budgets to breaking point.”

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