Martin Lewis discusses switching energy bills
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The Government is facing a mounting challenge after the calculation, by the Resolution Foundation (RF) think tank, highlighted the scale of the political challenge. But that number has not taken into account the end to the furlough scheme on Thursday, which could see many people lose their jobs and make matters even worse for some British households. The Furlough scheme saw the Treasury pay 80 percent of workers’ wages during the Covid pandemic.
And As of October 1, energy bills were expected to jump by around 12 percent as the price cap increases in the midst of a strain on UK gas supplies.
The energy price cap is backstop protection from the Government, calculated by Ofgem, the industry regulator.
It refers to the maximum price suppliers in England, Wales and Scotland can charge customers on a standard or default tariff.
But with a 12 percent rise on the cards, 15 million households are at risk of paying extra.
This comes after gas prices have soared to record highs, as well as Vladimir Putin limiting the supply of gas travelling into mainland Europe, some of which Britain exports.
This threatens to push some Britons into energy poverty.
And making matters worse, the poorest households face an end to the extra £20 uplift of Universal credit during the pandemic, as well as the National Insurance increase of 1.25 percentage points for more than 20 million people to help pay for the NHS and social care.
As of September 30, the amount of VAT hospitality businesses pay increased from five percent to 12.5 percent as a pandemic VAT holiday ended.
And with fuel shortages shaking up the nation, leaving stations without gas and threatening food supplies on supermarket shelves, a bleak winter could lie ahead.
While the Treasury tried to reduce the damage to the hardest hit by handing £500 million to councils that give three million families benefit around £100 each, Mr Johnson has now been warned that his Government should be providing further support.
Karl Handscomb, a senior economist at the Resolution Foundation, said: “Millions of families across Britain face a triple whammy cost of living crisis this autumn as rising energy bills and price increases collide with falling income support through Universal Credit.”
But, he warned: “Some of these pressures are beyond the Government’s control. “
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Resolution Foundation made their calculations by looking at how the changes could impact two types of households at the lower end of the income spectrum.
One was a single parent working part-time on the minimum wage.
The other was a family with two children, one working full-time and one working part-time.
Overall, it worked out that those families would lose out by around £300 in the next three months.
There are currently over four million households on Universal Credit.
Speaking on the matter, Mr Sunak said: “Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.
“Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the Government is already providing to help people with the cost of living.”
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