October price cap rise will leave 13 million in the red

• Dame Clare Moriarty: Millions face a ‘winter of despair’ without further support 

• Charity’s data shows record numbers already unable to top up prepayment meters 

New analysis from Citizens Advice shows 1 in 4 (24%) people in the UK simply won’t be able to afford to pay their energy bills in October based on current forecasts. This is double the number already in the red ahead of the price cap rise.

The figure could jump to 1 in 3(34%) people in January when prices are predicted to soar above £4,200. The charity’s projections take account the energy rebate and cost-of-living payments offered by the government, showing that spiralling costs are rapidly outstripping the support on offer.

Of those who won’t be able to pay in October, the majority (68%) have a household income of less than £30,000. Some will bear the brunt of rising energy bills, with 3.2 million disabled people and 4.4 million families with children set to be unable to afford October’s hikes. On average, those who can’t afford autumn’s predicted rise will end up almost £100-a-month in the red.

Citizens Advice says that future support must target those who need it most. Alongside further interventions from the government to help people with bills, it is calling for Ofgem to ensure that people are protected from the most serious consequences of falling into arrears. This includes a suspension of forced installations of prepayment meters.

An increasingly “squeezed middle”

The charity is also sounding the alarm that rising prices will drag more people into dire circumstances. Many of its frontline advisers are already sharing reports of people needing crisis support, such as food bank referrals and fuel vouchers, who’ve never previously contacted Citizens Advice.

Its analysis shows that over half (53%) who’ll be in the red come October won’t receive the additional cost–of-living payments targeted to people on benefits, disabled people and low-income pensioners. With future price rises rapidly outpacing the value of the energy rebate, it warns further action will be needed to stop more people falling into debt.

Winter problems in the height of summer

The charity’s latest data dashboard shows that despite a record-breaking heatwave, worries about paying energy bills are still front of mind for many it supports.

People who pay for their energy via prepayment meter are some of those struggling the most. In July, the charity saw record numbers of people who were unable to top up their prepayment meter - the fifth time this record has been broken this year

Meanwhile in July 2022, Citizens Advice’s web page on help with rising living costs was viewed over 70,000 times. This is an increase of 40% on its previous record in March 2020 when the country went into the first national coronavirus lockdown. 

Sally’s story: “If we can’t keep the house warm it’ll make my child’s asthma worse”

Sally* is a single parent who lives in London with her three children. Despite working two jobs, she’s struggling to pay her bills and has built up arrears, including to her energy provider. She’s extremely worried about the coming winter because her son has asthma and needs to keep warm, but she has no idea how she’ll cover the heating costs.

Sally says: “I’m having to rob Peter to pay Paul. I just can’t keep up and it’s getting worse with the bills going up. The kids don't get any little treats any more and we often end up needing help from the food bank because there’s not enough to cover everything.

“I’m spending £60-a-week just to keep the prepayment meter topped up. The biggest worry is how bad it’ll be when the cold weather comes in. I’m worried about my son’s health - if we can’t keep the house warm it’ll make his asthma worse. It’s stressful everyday thinking about it.”

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

“Every single day at Citizens Advice we’re already helping people in the most heartbreaking circumstances, trying to scrape together enough to feed their kids and keep the lights on. This will get far, far worse unless the government acts.

“It’s becoming increasingly clear that skyrocketing prices will swallow up all of the help that has been announced so far.

“Every day that goes by without a plan is another day without reassurance for people who desperately need it. We urgently need further support, otherwise we risk a winter of despair for millions.”

At 10am Wednesday 17 August, Citizens Advice will host a cost-of-living data briefing featuring insights from Rachel Wolf, Founding Partner of Public First and Dame Clare Moriarty, Chief Executive of Citizens Advice. Sign up on Eventbrite.

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Notes to editors:

1. Sally’s name has been changed to protect her identity.

2. Based on analysis of a representative poll of 6,000 adults (18+) in the UK conducted by ICM Unlimited for Citizens Advice. Fieldwork conducted between 27 May to 20 June 2022. Respondents were asked about the amount of money they have left after paying for essentials. People who responded with ‘Don’t Know’ or ‘Prefer Not To Say’ were excluded from the analysis leaving a sample of 3,939 adults. 24.3% of people surveyed said the amount of money they had left after paying for their essential bills was less than the average monthly increase for a price cap of £3,582, rising to 34.3% for a cap of £4,266. The financial support included in the calculation was the £400 Energy Bills Support Scheme which everyone receives, the £650 Cost of Living Payment for people receiving means tested benefits, the £150 Disability Cost of Living payment, and the £300 Pensioner Cost of Living payment.
   Note, the Cost of Living Payments are given to households, whereas ICM surveyed individual respondents. Therefore, some individuals who are not pensioners themselves but who live with a partner who is a pensioner will not be included in the analysis among those receiving the Pensioner Cost of Living Payment. Additionally the Pensioner Cost of Living Payment is available to those aged 66 or over, while the analysis includes those aged 65 and over.
   The analysis of people receiving the £650 Cost of Living payment is based on response to the question 'Which, if any, of the following state benefits or tax credits do you currently receive?'. The £650 one-off Cost of Living Payment for those on means tested benefits is available to anyone who is entitled to a payment, therefore some individuals who are entitled to payments but not receiving them will not be included.
   Population estimate is based on the estimated UK adult (18+) population in 2022 of 53,200,000 taken from the Annual PopulationSurvey estimates via Nomis.

3. The results of ICM’s polling showed that 12.2% of people are already unable to cover their essential costs.

4. ONS insights put the median disposable household disposable income after tax at £31,400. ICM polling asked about income before tax.

5. Families refers to people who have at least 1 child under the age of 18 living with them.

6. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

7. Our network of charities offers impartial advice online, over the phone, and in person, for free. 

8. We helped 2.4 million people face to face, over the phone, by email and webchat in 2020-21. And we had 40 million visits to our website. For full service statistics see our monthly publication Advice trends.

9. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,600 service outlets across England and Wales.

10. You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.