Energy bills could rise to £4,200 in January, more than the standard universal credit payments. Image: Mikhail Nilov/ Pexels
Universal credit claimants are “dreading” the winter, as energy bills could be more expensive than their entire income from January.
The energy price cap is expected to rise to £4,200 at the beginning of next year, according to forecasts from consultancy Cornwall Insight. By comparison, the standard allowance for a single person on universal credit is around £4,018 a year.
For a person under 25, the amount is even less, working out at around £3,183 a year. That means a young person would be left more than £1,000 short every month after they had paid their energy bills.
And benefits claimants are terrified. Kerry Wilks, a widowed mother of three who claims universal credit, said she is already struggling to pay her bills and cannot cut back anymore.
“It’s really, really bad,” she said. “I don’t put my boiler on unless I’m washing up the pots anymore for my gas. I’m using nearly £30 a week on electricity now. That’s with the lights out, and drying mine and my kids’ clothes outside in the warm weather. I dread to think what it’s going to be like in the dark nights and in the horrible weather. It’s a really scary time.”
Kerry cannot work because her 16-year-old son is autistic and requires full-time care. “I don’t know where I’m going to get the money from,” she remarked. “I don’t know what I can do. My lights and everything are turned off. I’m going round switching all the switches off. I’m really conscious of it.
“I’m using my washing machine less. I’m just continuously thinking about how to save money all the time. The price of food is ridiculous. Everything’s just going up and up and up, and the current Tory lot just haven’t got a clue.”
In October, the government removed the £20 weekly uplift to universal credit, introduced to help people through the financial impact of the pandemic. A loss of more than £1,000 a year – coupled with the huge spike in the cost of living – has left benefits claimants unable to cope.
Ministers promised a £650 cost of living support package for people on benefits. But according to campaigners and benefits recipients, this doesn’t go nearly far enough.
Experts at the Joseph Rowntree Foundation have said the government’s support package is only half of what is now needed to cover skyrocketing energy bills. They have calculated low-income families need £2,550 to meet extra costs in the current crisis.
“It’s a human right to have food,” Kerry said. “I cannot physically cut back anymore. I don’t know what I’m gonna do. It’s really scary for the likes of me and millions of others.”
Another benefits claimant and activist, who goes by the name Ben Claimant, agreed. He said: “I’m now paying £90 a month on electricity. It’s about double what it was before the crisis. That is a huge amount of money when you add it to everything else.
“My food bills are pretty much double what they were. Plus, as a disabled person, I need to keep the heating on in winter. All those extra expenses are just mind-blowing.”
Ben receives the employment support allowance, granted to people who cannot work because of a disability or long-term benefit. Disabled people will receive another £150 cost of living payment in September, but charities are warning that it won’t go nearly far enough to cover the additional costs of energy bills.
According to charity Scope, disabled people face extra costs of £583 a month. On average, a disabled person’s extra costs are equivalent to almost half of their income. Richard Kramer, chief executive at disability charity Sense, said that research had found that more than half of disabled people are in debt, while a third are already skipping meals.
“A lot of my friends are disabled and they’re having one meal a day,” Ben said. “They just snack on a packet of crisps when they’re really hungry. They’re not going out. They’re not having any kind of social life because they can’t afford it.”
Ben is eligible for a personal independence payment, but he claims a car and doesn’t get any additional money. But he doesn’t have enough money for petrol so can’t use the car.
“I’m sure there’s a lot of people in a much worse position,” he said. “It’s an absolute tragedy what’s going on. I used to find it quite difficult to talk about people dying, but that’s the reality of it. If we have a cold winter this year, we’re going to be really struggling.”
Asked what more support he would like to see from the government, Ben said: “In the short-term, there needs to be money that’s paid to people directly. In the longer term, we need higher benefits rates.”
Former prime minister Gordon Brown has called on the government to introduce an emergency budget to tackle the crisis in a campaign backed by the Big Issue. He has said the energy price cap should be frozen and energy firms should be re-nationalised as a last resort.
Other governments capped energy bills at much lower rates. Italy is keeping fuel bills around 2021 levels by taxing energy companies. France’s state-owned energy provider is capping wholesale price rises at 4 per cent a year. In Norway, there’s a maximum price for energy – anything above that, the government will pay 80 per cent of the bill.
Kerry said: “I don’t understand how other countries can cap it, but ours can’t. They’re just letting it spiral out of control. They could do a lot more.”
Campaigners at Enough is Enough, led by community organisations, Labour MPs and trade unions, have set out five demands for the government. They are calling for energy bills to be slashed, an end to food poverty, a real pay rise, decent homes for all, and taxes on the rich.
Rishi Sunak has promised another cost of living support package if he becomes prime minister, but he has not yet detailed how much that would be. Liz Truss has ruled out any further handouts – instead, she is proposing to cut taxes.
Kerry said there needs to be a long-term plan to help low-income households, who cannot cope with prices rising any more. Speaking about the current support package in place, Kerry added: “It’s only a short term sticking plaster. It’s nothing. When you add everything up, it’s nothing.”
If you are struggling, there are places you can seek help:
Charitable grants offer financial support to people who are struggling – and the money doesn’t need to be paid back. You can find out what grants might be available to you using Turn2Us’ grant search. Grants are usually also available to people who have no recourse to public funds and cannot claim welfare benefits. Turn2Us helps people to access grants and support services if they’re in financial difficulty. If you contact them, they’ll check what’s available to you.
Glasspool gives small grants for things like white goods, beds, bedding, children’s clothing and baby needs.
Family Action provides practical, emotional and financial support to those who are experiencing poverty, disadvantage and social isolation across the country.
Local councils may be able to give you debt advice, help you get hold of furniture, support you through food and fuel poverty. There are local welfare assistance schemes, also known as crisis support. Find out what support your council offers through End Furniture Poverty’s local welfare assistance finder.
Scottish Welfare Fund is offered in Scotland to provide a safety net for people on low incomes. These include crisis grants and community care grants.
In Wales, there is the Discretionary Assistance Fund. This includes an emergency assistance grant, which helps cover essential costs, such as food, gas, electricity, clothing or emergency travel if you are experiencing extreme financial hardship, have lost your job or are waiting for your first payment.
Citizens Advice offers information and services to help people who are struggling with a range of issues such as the cost of living. Contact your local Citizens Advice for help. They can also advise you as to what financial support is available from the government to help you – including universal credit.
Food banks support people who cannot afford the essentials. Many food banks are run by the Trussell Trust and you can find your local one on their website. For advice and support around your financial crisis you can also call one of the charity’s national helplines.
Your local vendor is at the sharp end of the cost-of-living crisis this Winter. Prices of energy and food are rising rapidly. As is the cost of rent. All at their highest rate in 40 years. Vendors are amongst the most vulnerable people affected. Support our vendors to earn as much as they can and give them a fighting chance this Winter.