Money A+E calls on the government to set out concrete plans for more targeted cost of living support as urgently as possible, in order to avert a debt and mental health emergency as average energy bills rise to £3,549/year.
The average household energy bill is expected to hit £3,549/year when the energy price cap is lifted in October. This is forecast to exceed £4,000-£6,000 by early 2023.
Greg Ashby MBE, Money A+E Co-Founder and Director of Operations:
'Today’s news is devastating for those in our society who are already the most financially vulnerable, to whom Money A+E targets its services: low income households; Diverse Ethnic Communities; people living with disability or long-term physical or mental health challenges; and young people.
'These astronomical rises in energy costs will deepen the distress and fear that we see daily among clients of our debt, benefits and money advice service.
''The number of clients coming to our service with ‘deficit budgets’ has already risen by 68% this year. This means that their income simply does not cover their essential expenses, on average by a -£577 difference.
'We are also frequently supporting people with debts of £1,000s, sometimes £10,000-plus. These debts are generally being incurred on rent and essential household bills.
'The individuals and households that we support are simply not able to absorb the energy bill rises announced today. They will be plunged deep into debt, poverty and acute mental distress. We expect to see rises in homelessness, loan sharks, and children and families having to face impossible choices between heating and eating.
'We welcome the government’s package of cost of living support announced in May, and its responsiveness to the voices of individuals and charities at that time.
'However, the value of these payments (£400 to £1,500, depending on circumstances) does not reflect the size of the energy bills we are now expecting. We urgently need support and intervention that is on the scale of the new reality of £3,500+ energy bills.
'We call on Prime Minister Johnson, Conservative leadership candidates Ms Truss and Mr Sunak, and Chancellor Zahawi to set out plans for support and intervention as soon as possible, to avert a widespread debt and mental health catastrophe.'
If you are worried about money, you can contact Money A+E for 1-2-1 advice.