More than 830,000 lower-income families are set to miss out on the government’s £100 energy bill support due to how the scheme is targeted, new analysis has found.
Around 20 million households across the UK are set to receive a £100 discount on their energy bills from January through the Household Energy Payment announced in last week’s Budget.
This will be paid to all households in council tax bands A to D in a move set to cost the government £2.6bn. This will be funded through a temporary tax increase on bank profits, chancellor John Healey announced.
Announcing the measure, he said: “I know that with the conflict in the Middle East, rising energy bills are a real worry.
“I know that people look to government at times like this, not to solve all their problems, but to give them a bit of breathing space.”
However, 838,000 households currently claiming Council Tax Support will not benefit from the payment despite being in higher need, analysis by Policy in Practice has found.
The research unit explains: “Council tax bands are an imperfect proxy for household needs. Low-income households can live in larger, higher-band properties, and often have little choice over the size or band of property they’re allocated. And increasingly, several families or generations share a home to manage costs.”
Researchers add that 84 per cent of households set to miss out on the payment currently live with a disabled person, contain children, or are below the poverty line.
The findings comes alongside official estimates from the government that 12 per cent of households in the bottom three income deciles will not receive the payment, alongside 17 per cent of those in fuel-stressed households.
Initial reaction to the measure from the Resolution Foundation went further than this, finding broadly that around 1.4 million households in the bottom half of income distribution are set to not receive the payment. For the average household, this level is anything below around £39,200 a year.
Deven Ghelani, the director of Policy in Practice, said: “Over 800,000 low-income families are going to be missing out on this vital relief from high energy bills.
“Millions of people are [also] missing out on over £24bn of support that is going unclaimed each year because of low awareness, administrative complexity and stigma,” he told The Times.
The findings and payment come as energy bills are forecast to see a massive spike in January. Large provider EDF now forecasts a 27 per cent rise to £2,189 – up £446 a year on October’s rate.
Alongside the new payment, the chancellor announced a new £100m funding commitment to discretionary support funds for local councils. Typically, these need to be applied for rather than being automatic.
A government spokesperson said: “Tackling the affordability crisis is our priority, which is why we’re giving families immediate breathing space.
“From January, millions of households will receive £100 towards their energy costs from January, alongside action to make bills fairer, including removing standing charges from gas bills and supporting those in energy debt.”
