Starmer urged to help households as energy bills rise by £149 a year

Keir Starmer has been urged to intervene to help households tackle rising gas and electricity bills this winter, as average energy bills rise by £149 a year from Tuesday.

The Resolution Foundation thinktank said the prime minister must “do more to support vulnerable households” no longer eligible for winter fuel payments – as well as those who were never eligible – after its research found 7.7 million households were likely to struggle to heat their homes this winter.

Starmer has faced sustained criticism over the government’s decision to cut winter fuel payments for all but the poorest pensioners receiving pension credit.

The energy price cap, set by the industry regulator Ofgem and covering October to December, will rise by 10% to £1,717 a year for an average dual-fuel household in Great Britain paying by direct debit. The increase adds to pressure on household bills just as temperatures drop and many consumers switch the heating back on.

An increase in wholesale energy costs has pushed up bills and the new cap represents a significant rise from its previous level of £1,568, which had been in place since July.

Annual bills remain far higher than before the energy crisis, which began in 2021 and was exacerbated by Russia’s full-scale invasion of Ukraine the year after.

According to the Resolution Foundation research, 7.7 million households in England – including the majority of families with children – are at risk of “fuel stress” this winter.

The analysis of government data found that 37% of all households faced “fuel stress”, defined as families needing to spend more than 10% of their income on heating their homes excluding housing costs. It found that 77% of single-parent households are likely to experience “fuel stress” this winter.

Last month, MPs voted through the government’s plan to axe the winter fuel allowance – which was £200 or £300 depending on the recipient’s age – for all but the poorest pensioners on pension credit.

However, the Resolution Foundation said the winter fuel support had been “poorly targeted” as many of those struggling are working-age families rather than pensioners.

Alex Clegg, an economist at the thinktank, said: “Couples with children are more than twice as likely to experience fuel stress as pensioner households, so any new support should not be limited to pensioners.”

He suggested reforming the cold weather payments scheme, which gives people on low incomes who receive certain benefits £25 after seven consecutive days of freezing temperatures in their area. Reworking the initiative “offers a viable quick-fix solution to help keep households warm when the mercury drops this winter”.

Clegg added: “Looking beyond this winter, the government should prioritise developing a social tariff and investing in energy efficiency for our homes. This would help to ensure that vulnerable families are insulated from future energy shocks, whatever their age or circumstances.”

The Ofgem cap limits the unit price for gas and electricity used by consumers, but households using more energy will still pay more.

While many energy suppliers will continue to offer rates equivalent to the £1,717 cap, some are offering cheaper deals for consumers paying a fixed price. Ovo and EDF are offering one-year fixed deals at about £150 cheaper than the cap with exit fees of £50 and £25 for each fuel respectively, according to Uswitch.

In a small fillip for struggling households, the respected consultancy Cornwall Insight predicted there would be a 1% fall in the Ofgem cap in the three months from January to a rate equivalent to £1,697 a year for a typical dual fuel consumer, helped by an improving picture for European wholesale gas supplies. In August, Cornwall had forecast a 3% rise in the cap in January.

Almost half of British adults will ration their energy use this winter, according to the fuel poverty charity National Energy Action.

Separate analysis by the Energy and Climate Intelligence Unit (ECIU) found that those homes with the poorest energy efficiency – including due to poor insulation – rated at an Energy Performance Certificate (EPC) band F would pay more £440 more than pre-crisis and £385 more than a house rated in the government’s target EPC band C.

A government spokesperson said: “We will do everything possible to support vulnerable families this winter – including with the £150 warm home discount expected to support 3 million eligible households, while around 1.3 million households in England and Wales will continue to receive up to £300 in winter fuel payments.

“Alongside this, our plans for the biggest potential boost to home energy standards are set to lift 1 million households out of fuel poverty.”