Energy price rise to ‘devastate’ UK’s poorest families without urgent action, report warns

Some low-income families will need to spend more than half of their income after housing costs on gas and electricity, says Joseph Rowntree Foundation

Close to one in three children were living in poverty in 2019-20, the Joseph Rowntree Foundation estimates (Getty/iStock)

Soaring energy bills threaten to “devastate” the UK's poorest families, who face spending more than half of their income after housing costs on gas and electricity this year, a leading charity has warned.

Single-adult families on low incomes will be hardest hit, spending 54 per cent of their income after housing costs on energy, the Joseph Rowntree Foundation estimated.

The anti-poverty charity called for urgent action to ease the cost-of-living crisis, while Labour said the analysis revealed “shameful” levels of child poverty.

Households face an average 47 per cent increase in their energy bills when the price cap is increased in April, with a further rise expected in October.

Low-income families could spend on average 18 per cent of their total income on energy bills from April, according to the JRF. Lone parents and couples without children will spend 25 per cent.

Middle-class households are forecast to see a relatively modest budget hit, with energy accounting for around 6 to 8 per cent of their incomes, on average.

People in poverty also have less ability to absorb rising costs. Just over a third of people in poverty have liquid savings of less than £250, compared with one in six of the overall population, the JRF found.

The findings were released as part of the charity's UK Poverty report, which detailed a “worrying increase” in children living in the deepest poverty.

Close to one in three children were living in poverty in 2019-20, rising to nearly half of children in single-parent families.

Around 1.8 million children were growing up in very deep poverty in households with 40 per cent or less of the average income. This is an increase of half a million children since 2011-12.

Katie Schmuecker, JRF deputy director of policy and partnerships, said: “No childhood should be defined by a daily struggle to afford the basics. But the reality is that many children growing up today won't have known anything else.

“The fact that more children are in poverty and sinking deeper into poverty should shame us all.

“Rising energy prices will affect us all, but our analysis shows they have the potential to devastate the budgets of families on the lowest incomes.

“The government cannot stand by and allow the rising cost of living to knock people off their feet.”

Jonathan Ashworth, Labour’s shadow work and pensions secretary, said: “This is a damning analysis, revealing the increased shameful levels of child poverty across the country.

“Tory economic incompetence has given us a devastating cost-of-living crisis with rocketing energy bills, universal credit cuts and price rises in the shops set to hit struggling families hard and abandon more children to sink further into poverty.

“Not only does growing poverty mean a weaker, less prosperous economy, it also represents a criminal waste of the talents of the British people.”