More than 14 million unable to afford October’s energy hikes

New research published today by Citizens Advice shows predicted £145-a-month hikes to energy costs in October could mean one in four adults - equivalent to 14.5 million people - will be unable to afford their bill. 

This is up from around five million saying they already can’t afford April’s price increase of £60-a-month. The charity included the government’s support measures in its calculations.

Two in five (41%) of those warning they’ll be pushed into the red next month have already borrowed money to pay for essentials.

The stark findings come ahead of next week’s Spring Statement where the Chancellor has been urged to announce further support for families struggling to pay their bills.

Citizens Advice issued a ‘red alert’ warning last month as demand for its services soared. Its frontline staff are continuing to help record numbers access crisis support like food banks and one-off charitable grants amid the cost-of-living crisis.

In the last week alone, Citizens Advice advisers have supported: 

• A woman who couldn’t afford to top up her prepayment meter after a hospital visit meaning she was left with nothing but spoiled food in the fridge

• A parent who had to turn off their appliances and wash their children’s clothes at their mother’s house to save on energy costs

• A woman in her 70s in with a chronic health condition who wears multiple layers and her duvet to keep warm as she can’t afford to put her heating on

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“These staggering findings must be a wake-up call to the government. With one in four unable to afford their bills come October, measures announced so far simply don’t meet the scale of the challenge. 

"Parents shouldn’t have to decide between giving their kids a hot bath or saving the money to buy them new school shoes. 

"The Chancellor has a crucial opportunity to bring forward more support for those most in need in his Spring Statement next week. Increasing benefits in line with inflation, expanding the Warm Home Discount and announcing a more generous energy rebate should be top of his list."

Three key findings from Citizens Advice’s latest research:

1. Many don’t think the £200 energy rebate will help

In February the Chancellor announced a £200 energy rebate which is anticipated to be paid into customers’ accounts in October and paid back over the following five years. 

Citizens Advice found more than eight in 10 (83%) said that they did not think that the government's loan would make a significant difference to their ability to pay their energy bills.

2. Prepayment customers will feel the biggest pinch

People using prepayment meters - many of whom are already on low incomes - are set to be hardest hit by rising energy prices.  They’re less able to spread the cost of their energy throughout the year and are at greater risk of being disconnected if they can’t afford to top up.

Rising energy costs could see an average family on a prepayment meter facing bills of £336-a-month - over £10 a day - in December 2022, when the same usage would have cost them £147 in December 2021.

3. Demand for crisis support continues to grow 

February has continued to break unwelcome records when it comes to people seeking support from Citizens Advice. Referrals for crisis support like food bank vouchers and charitable grants in February surpassed January’s previous peak, with more than 24,000 people referred for support.

Additionally, advisers supported more than 1,000 people on prepayment meters who simply couldn’t afford to top up and were at risk of losing heat and power.

Notes to editors

1. Full research can be found in Citizens Advice’s report “Crunch Point”

2. 14 million figure and five million figure based on analysis of a representative poll of 6,000 adults (18+) in the UK conducted by ICM Unlimited for Citizens Advice in January 2022. The difference between the current price cap (£1277) and the April price cap (£1971) is £694, just under £60 per month. The combined impact of the £350 Council Tax and energy rebates reduce this to £30 per month. 9.85% of people surveyed said they had less than £30 left after paying for their essential bills. Population estimate is based on 9.85% of the estimated UK adult (18+) population in 2022 of 53,200,000 taken from the Annual Population Survey estimates via Nomis.

3. Based on analysis of a representative poll of 6,000 adults (18+) in the UK conducted by ICM Unlimited for Citizens Advice. The difference between the current price cap (£1277) and the forecast October price cap (£3000) is £1,723, just under £145 per month. The combined impact of the £350 Council Tax and energy rebates reduce this to £115 per month. 27.19% of people surveyed said they had less than £115 left after paying for their essential bills. Population estimate is based on 27.19% of the estimated UK adult (18+) population in 2022 of 53,200,000 taken from the Annual Population Survey estimates via Nomis.

4. Figures on opinions about the energy rebate come from Opinium. Opinium surveyed 10,301 UK adults aged 18+ between 8th to 17th February 2022. The data was sampled and weighted to be representative of the UK adult population.
   Cost calculated using Ofgem's medium Typical Domestic Consumption Values for the October 2021 prepayment price cap, and for the estimated October 2022 price cap of £3000. Monthly usage figures are based on Ofgem estimates of the amount of the annual bill value it is expected consumers will use in each month of the year.
   Based on the combined contacts to the Consumer Service and Local Citizens Advice offices. In February 2022 1,140 contacted Citizens Advice about self disconnection, compared to 648 people in February 2021.

5. Citizens Advice referred 24,197 people to crisis support in February and 23,989 in January.

6. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
7. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
8. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
9. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
10. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
11. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
12. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
13. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
14. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.