For people who were already in poverty before the pandemic, the last 18 months have hit particularly hard. Many have had to deal with a drastic reduction in income due to job losses, and those on benefits are now facing the combined blow of a 20-pound cut to universal credit, inflation at its highest level in 10 years and a larger increase in fuel prices. It is, says Matt Copeland, head of political affairs at National Energy Action, a “toxic cocktail.”
In fact, a study by the Legatum Institute showed that 700,000 people had already been thrown into poverty by 2020. Many people addicted to casual work were suddenly unemployed and not entitled to leave schemes during this period, exacerbating the problem.
Between 1 April 2020 and 31 March 2021, Trussell Trust’s network of food banks distributed DKK 2.5 million. emergency aid packages – an increase of one third compared to the previous year and an increase of 128% compared to the same period five years ago, which tens of thousands found. even by using a food bank for the first time.
“If someone can not afford food, it is likely that they are already struggling to afford heating and their core supplies, as well as other things, including their housing costs and personal hygiene items,” says Emma Revie, CEO of Trussell. Confidence. Even before the rise in fuel prices, she adds, 95% of the people who needed help from food banks already experienced distress.
But as the cost of natural gas rises, there are fears that far more households will be thrown into fuel poverty. This term can be defined in several ways, but one definition is a household that spends more than 10% of its net income on energy bills. By this measure, 2.5 million households were already in fuel poverty by 2021, and a study from York University predicts that number will rise to nearly 3.5 million this year.
These households will be confronted with what Simon Francis, coordinator of the End Fuel Poverty Coalition, describes as the “terrible choice” between turning on the heat or paying for food.
“Some groups are more likely to fall through the safety net than others,” Revie says. Disabled people, she says, are markedly overrepresented in food banks. But families with multiple children are also hard hit because of the combined cost of cooking regularly for multiple people and keeping the house warm.
Those on the front lines are already observing this move. Between mid-October and mid-November, the Citizens Advice Bureau (CAB) said it saw a 10% increase over the previous month in people seeking referrals to food banks and for extra charitable support, including for toiletries and other essential things. Kayley Hignell, head of policy for families, welfare and work at CAB, says that since the cut to universal credit, advisers have seen an increase in the number of people in need of crisis support. “It means food bank referrals so families can put a meal on the table and fuel coupons so they can keep warm,” she says.
Others are in extremely desperate situations due to the overlapping effects of disease and poverty. Hignell cites as an example a cancer patient referred to CAB who can only afford to heat a room in their house because the money is so tight after the universal credit cut. “They are struggling to afford healthy food and are worried about rising bills this winter,” she says.
But the rise in natural gas prices does not only mean higher bills. Twenty-eight energy suppliers went bankrupt in 2021, with potentially devastating consequences for those behind their bills. When user debt from these suppliers is transferred to an administrator, other rules may apply, says Copeland: “While an energy supplier must have detailed conversations with you to ensure that you are able to pay and that you are in a reasonable manner . repayment schedule, you could just get a visit from the administrator and ask for the money, and debt collection agencies can get involved very quickly. ”
Furthermore, Copeland says that if a household uses a prepayment meter and their supplier goes bankrupt, the infrastructure that allows them to fill up their meter can stop working – and leave them without energy.
Low-income households are eligible to apply for the government’s heating home rebate scheme, a one-off rebate of £ 140 on electricity bills for low-income households. If the discount is agreed with the supplier but not yet paid and the supplier goes bankrupt, there is no guarantee that it will be transferred to the new supplier, says Copeland.
Only limited help is available. The £ 500m Household Support Fund and Cold Weather Payment of £ 25 for each seven-day period of very cold weather were introduced to help poorer households. They want to make a difference, Copeland says, but not enough. Food banks in the Trussell Trust network also help by signposting users to specialist welfare advisers, who make sure they receive their full right. But, Revie says, even the full rights available can often not be enough in practice. “We see people in food banks who have their maximum entitlement or who have secured everything they can and still can not afford to pay for the essentials,” she says.
Revie is deeply concerned about what the next year may have in store for those on the brink of distress. “Emergency food packages are an adhesive patch,” she says. “We know [demand] is driven by people not having enough money. A marked increase in energy prices for households that are already having a hard time will have a catastrophic impact – I do not think we can really exaggerate that. “