2.5 million households with children in fuel poverty after new energy price cap comes into effect

Over half (55.7%) of lone-parent households (855,938) will be in fuel poverty from today

A photo of coins on top of an article explaining that Energy companies are raising prices

The new energy price cap coming into force today means that 2.5 million households with children are now in fuel poverty, as families are hit with an increase in energy costs, national insurance contributions and council tax statements.

With the energy price cap rising by 54% to £1,971, the End Fuel Poverty Coalition estimates that rises in energy bills will take the number of households with children in fuel poverty to over 2.5m from today. It also says that over half (55.7%) of lone-parent households (855,938) will be in fuel poverty from today. The figure is 33.4% for couples with dependent children (1.69m).

The Resolution Foundation also says that 5 million English households will pushed into fuel stress from today, where households spend more than 10% of after housing cost incomes on energy bills.

The think tank warns: “This is not the end, though. Against a backdrop of the highest inflation rate in 40 years and continued falls in real incomes, all indicators point to the price cap rising again in October, just as winter bites and households increase their energy use. An increase to £2,500 would see another 2.5 million households fall into fuel stress.”

Millions more will be waking up in fuel poverty today, with think tanks like the IPPR calling it a ‘dark day’ for the poorest.

The British Medical Journal has also highlighted in a study the link between fuel poverty and ill health.

It stated: “Children growing up in cold, damp, and mouldy homes with inadequate ventilation have higher than average rates of respiratory infections and asthma, chronic ill health, and disability. They are also more likely to experience depression, anxiety, and slower physical growth and cognitive development.”

Commenting on the rise in the energy cap, Jonathan Marshall, Senior Economist at the Resolution Foundation, said: “Today’s energy price cap rise will see the number of households experiencing fuel stress double to five million. With the price cap expected to rise sharply again on 1 October, a further 2.5 million households could fall into fuel stress this autumn, unless more support is provided.

“There are no easy ways to protect people from rising bills in the current climate. But with many of the poorest households missing out on the Council Tax rebate, this scheme should be used to supplement, rather than replace, support via the benefit system, which is better equipped to target lower-income families.

‘Another increase in energy bills this autumn hastens the need for more immediate support, as well as a clear, long-term strategy for improving home insulation, ramping up renewable and nuclear electricity generation, and reforming energy markets so that families’ energy bills are less dependent on global gas prices.’

Basit Mahmood is editor of Left Foot Forward

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