Poorest families facing £1K shortfall on rising energy costs

A report from the Child Poverty Action Group estimates there will be a £1K shortfall in energy costs for the poorest families this year and says cost of living support fails to take in higher costs associated with having children.

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Low-income families will have an estimated £1,000 shortfall for energy costs alone in the year to April 2023 if Ofgem’s price cap rises to £3,554 in October, according to new analysis by the Child Poverty Action Group.

The CPAG says average energy expenditure is 30% higher for families with children than for households without kids while the Government’s cost of living support package – typically £1,200 for qualifying households on means-tested benefits – takes no account of these extra costs. The CPAG says energy bills for families with children are likely to rise by an estimated £2,200 on average in 2022-2023, leaving a £1,000 gap for families to cover. It adds that energy bills for the average family with kids are on course to reach £3,600 in 2022/23.

The CPAG says energy bills are just one component of the living costs crisis families are facing, with the Institute for Fiscal Studies estimating that the poorest households (who spend a larger share of their income on food and on energy) are facing an inflation rate of 17.6%.

The CPAG says the Government must act now to strengthen support for families with children to recognise the additional financial pressures they are facing, including an increase in support of at least an extra £1,500 for families with children and £700 more for households without children and an 18% increase in benefits.

Chief Executive of Child Poverty Action Group Alison Garnham said: “With a £1,000 shortfall just for energy bills, many struggling families will fall through the ice this winter unless the Government makes more help available fast.  Over the next few months families will need extra support that covers their costs and reflects family size, and social security must rise to match inflation from April.  Four million children are already in poverty with many others now perilously close to it.  Leaving their families to sink cannot be an option.”

The TUC has also outlined a pathway to a minimum wage of 15 pounds an hour. Meanwhile, the Resolution Foundation thinktank has called for radical policies such as price freezes, solidarity taxes or lower social tariffs to prevent the cost of living crisis worsening. And the British Chambers of Commerce has warned of widespread company failures without Covid-style emergency support.



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