The energy crisis in the UK is showing no signs of stopping. As experts say that the energy price cap will rise again in October, many worry about not being able to afford paying for their energy supply.
Fuel poverty, a condition where a household cannot afford to heat their home, is becoming a growing problem around the UK. As the End Fuel Poverty Coalition explains, ‘The depth of fuel poverty is measured by the fuel poverty gap, which is a measure of the additional fuel costs a fuel poor household faces in order to be determined non-fuel poor.’
The government needs to intensify efforts to help the poorest families. With that in mind, the Chancellor announced that millions of vulnerable households will receive £1,200 to help cover the cost of living.
Here are the details:
There are eight million most vulnerable households in the UK and almost all of them will receive this support
£650 is a new one-off cost of living payment
Universal support that had been introduced after previous increases to the energy price cap will go up to £400
The October discount on energy bills will be doubled and there will be no requirement to repay it over five years
The new scheme targets low-income households and brings the total cost of all living support tools to £37 billion
Energy Profits Levy on oil and gas firms will raise around £5 billion over the next year to help with cost of living and encourage companies to invest in oil and gas extraction in the UK.
The UK government announced ‘The significant intervention includes a new, one-off £650 payment to more than 8 million low-income households on Universal Credit, Tax Credits, Pension Credit and legacy benefits, with separate one-off payments of £300 to pensioner households and £150 to individuals receiving disability benefits – groups who are most vulnerable to rising prices.
Rishi Sunak also announced that the energy bills discount due to come in from October is being doubled from £200 to £400, while the requirement to pay it back will be scrapped. This means households will receive a £400 discount on their energy bills from October.
The new Cost of Living Support package will mean that almost all of the eight million most vulnerable households will receive at least £1,200 of extra support this year, including the £150 council tax rebate that many families received last month – equal to the average energy price cap rise over this year.’
Which households qualify for the £650 one-off cost of living support?
The new measure is expected to significantly improve the living situation of vulnerable families. To be able to get the payment, households need to be receiving one of the following benefits:
Universal Credit
Income Support
Working Tax Credit
Child Tax Credit
Pension Credit
Income-related Employment and Support Allowance
Income-based jobseekers Allowance.
The payment will be made in two installments and will be tax-free. Moreover, it will not count towards the benefit cap, and will not have any impact on the amount of money households already receive in benefits.