Low-income households will be left an average of £209 short on their energy bills this financial year, according to research by consumer organisation Which? It comes despite the government's Energy Price Guarantee being extended for three months to the end of June.
It will limit a typical household energy bill for dual-fuel gas and electricity to £2,500 a year, but Which? says millions of low-income consumers will still face higher energy bills this financial year. Although energy prices are predicted to drop to around £2,000 for the average household from July, it said consumers will still be paying almost double the amount they paid before the energy crisis began.
Which? predicts this will mean the poorest 10 per cent of households will have to spend an average of £209 more on energy this financial year than last. Meanwhile the Energy Bill Support Scheme - which provided an additional £400 to all households in the UK from October 2022 - March 2023 - has also ended.
Whether a household falls into the poorest 10 per cent of households depends on both income and family size. For example, a single person household in this group would earn less than £9,800 per year, while a couple with two children would earn less than £20,500 after taxes and benefits are taken into account.
Which? estimates that despite the lowest income households typically using less energy, they will be £75 worse off a year than a household with average energy consumption - who will spend £135 more on energy bills next financial year. This is because the average low-income consumer uses less energy than those on higher incomes so they will not benefit as much from lower energy prices - but will still feel the loss of £400 of additional support from the Energy Bill Support Scheme.
Higher costs could be especially difficult to manage for prepayment meter users who are typically on lower incomes, it warned. This is because they cannot spread costs across the year and would see a spike in costs during the cold winter months.
Ministers have announced that cost of living payments to those on qualifying benefits will continue. However Which? says this will leave low-income households who are struggling to make ends meet - but do not qualify for benefits - out in the cold.
It is calling for urgent action to bring in an energy social tariff to protect the most financially vulnerable. It says this should be based on both household income and energy usage, without creating a cliff-edge based on benefits eligibility.
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Rocio Concha, Which? director of policy and advocacy, said: "It's hugely worrying that consumers on the lowest incomes could be left over £200 worse off on their energy bills this financial year due to reduced government support. With millions of low-income households across the country already struggling to make ends meet, the government urgently needs to introduce a properly targeted energy social tariff to ensure the most financially vulnerable are able to heat their homes."
