The Chancellor is said to be proposing a package to help people pay their energy bills in July followed by further help with energy bills and general tax cuts in the autumn. If the proposals get the green light, millions of Britons will benefit.
This comes amid worrying news that inflation has hit nine percent – with prices rising at their fastest rate in 40 years.
The Consumer Prices Index (CPI) showed an increase from March, when the rate was seven percent and February, when it was 6.2 percent.
Chancellor of the Exchequer, Rishi Sunak said today: “Countries around the world are dealing with rising inflation.
“Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.
“We’re saving the average worker £330 a year through reducing National Insurance Contributions, changing Universal Credit to save over a million families around £1,000 a year, and providing millions of families with £350 each this year to help with their energy bills.”
StepChange Director of External Affairs Richard Lane said at present the measures being taken by the Government to help those struggling aren’t enough.
He said: “The widening gap between people’s incomes and the cost of their essential spending is opening up problematic fault lines in household finances and contributing to debt problems, especially for lower income households whose budgets have little ability to flex.”
“While we don’t doubt that policymakers are aware of the problem, at present the measures being taken to plug the gap are simply not sufficient to help many households avoid incurring debt as a result of the rising cost of living.
“We need to see targeted support specifically aimed at those households whose budgets don’t have the bandwidth to absorb higher costs – such as people on low incomes and relying on social security for some or all of their income, and those with vulnerabilities that mean they have specific needs and cannot cut their spending in areas such as energy or food.
“These groups are already over-represented among those experiencing problem debt, and there is no time to lose if their financial situation is to be prevented from worsening drastically over the coming months.”
Becky O’Connor, head of pensions and savings at interactive investor, said proposals to increase the Warm Home Discount might take the edge off, but they wont go far enough.
She said: “Even today’s pensioners may barely remember the last time inflation was this high – 1982 was the year of the Falklands War.”
She continued: “The increase in costs to households of basic energy is a huge shock to the system. Proposals by the Government to offer warm home top-ups might take the edge off, but come winter, the household finances of the most vulnerable will still be in the deep freeze.
“Energy price rises are panic inducing.”
She reminded people to make full use of all discounts available to them, especially Pension Credit.
Ms O’Connor added: “You may be eligible for additional support from your local authority and it is worth checking. It will be very hard to get through the next few months without help, so don’t delay.
“Age UK and Citizens Advice may also be able to help you identify the best sources of support for your circumstances.”
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