‘Don’t cut credit as energy prices rise’

THE Government is under renewed pressure to reconsider an imminent cut to Universal Credit payments, as campaigners warned that the impact of energy price hikes on top will be devastating.

Millions of households are set to be hit with energy bill hikes just as their Universal Credit payments are cut, the Resolution Foundation think-tank warned.

Some 4.4 million households on Universal Credit are poised to see their energy bills rise significantly in October - the same month they will typically lose over 5% of disposable income as the £20-a-week uplift to the benefits payment ends - the Foundation said.

The energy price cap is set to rise by £139 a year (12%) to £1,277 for a typical gas and electricity customer a year from October 1.

But a larger increase of £153 (13%) a year will affect pre-payment meter customers, the Foundation said.

Families on Universal Credit are four times as likely as the wider population to be on pre-payment meters - and pre-payment meter customers are overwhelmingly on variable rather than fixed rate tariffs and so will be more swiftly affected by price rises it added.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “This is a hugely unsettling time for millions of energy customers. It’s particularly worrying for many on the lowest incomes who’ll be facing the double whammy of rising fuel bills and a benefits cut.

“With choppy waters ahead, the single best thing the Government can do is keep its lifeline of £20-a-week to Universal Credit.”

The uplift in Universal Credit payments is scheduled to end on October 6.

Downing Street has insisted the cut will go ahead.

A Number 10 spokesman said the “uplift to Universal Credit was always temporary”.

It had been designed to “help claimants through the economic shock and the toughest period of the pandemic”.

Jonny Marshall, senior economist at the Resolution Foundation, said: “Low income families are facing a cost of living crunch on several fronts this autumn with energy bills rising alongside wider price increases, while Universal Credit is also due to be cut by £20 a week.

“Around 15 million households are set to face higher prices next week when the energy price cap is raised.

“This will be particularly acute for low income families on Universal Credit, who are four times as likely as the rest of the population to be on pre-payment meters, and therefore face even bigger increases to their bills.”

There are also concerns about how cancer patients will cope with the added pressure on their finances. Steven McIntosh, executive director of advocacy and communications at Macmillan Cancer Support said: “A cancer diagnosis can put a huge strain on people’s finances - whether because they’re simply too ill to work, or encounter much higher costs for bills or travel while having cancer treatment.

“It is utterly unconscionable that Universal Credit is being cut.”

Conservative former Cabinet minister Damian Green said “now is not the time” to cut the benefit and told the BBC: “We are clearly coming into a huge problem for the cost of living for people, so those who are receiving Universal Credit - many of them are in work and so therefore are working as hard as they can to keep their families out of poverty - they will be the ones who are going to be most hit by the upcoming problems with inflation and energy prices and so on.”