The Department of Work and Pensions (DWP) has been urged to increase Universal Credit payments by at least £25 a week as the cost of living crisis worsens. It comes after Ofgem announced that the energy price cap will rise to £3,549 from October this year - an increase of around 80 per cent.
Campaigners are now calling on the government to act swiftly, saying the situation is as severe as when the Covid pandemic hit the UK and the government introduced a temporary uplift to Universal Credit payments. For 18 months from March 2020, claimants received an extra £20 per week.
Welfare organisations are asking for an immediate national response to rising energy prices and say a weekly uplift in Universal Credit payments would help those struggling with bills the most, Birmingham Live reports. National poverty charity Turn2us is calling on the government to introduce a cap on energy costs and increase Universal Credit and legacy benefits by a minimum of £25 a week.
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Thomas Lawson, Turn2us chief executive said the "meteoric rise in the energy cap will cripple those of us in the UK already struggling to stay afloat." He added: "This is no longer a choice between heating and eating, but not being able to afford either. This is as big an emergency as the impact of Covid and needs a similarly confident government response. As one of the wealthiest economies, it’s simply not acceptable to consign more than a quarter of us into poverty."
Fuel poverty charity National Energy Action (NEA) estimates the latest rise will increase the number of UK households in fuel poverty from 4.5 million last October to 8.9 million this October, despite the current government support. Chief executive Adam Scorer said: "The scale of harm caused by these price rises needs to sink in. A warm home this winter will be a pipedream for millions as they are priced out of a decent and healthy quality of life."
He added: "The government needs to immediately upgrade the household support package it first announced back in May. Households need money in their pockets to weather this storm or we are going to see millions in dangerously cold homes, suffering in misery with unimaginable debt and ill health."
Cornwall Insight warns that prices are set to continue rising into next year. Analysts are forecasting that prices will rise from £3,549 in October to £5,387 in January when the next price cap review comes into effect, a 52 per cent increase, and then to £6,616 in April, up another 23 per cent. That would take the average monthly bill from £296 in October (already up from £164) to £449 in January and £551 in April.
Chancellor Nadhim Zahawi has said the government is "working flat out" to develop a new package of support for consumers, but any new measures will not be announced until a new prime minister is in place next month.
A DWP spokesman told BirminghamLive : "We recognise people are struggling with rising prices which is why we are protecting the eight million most vulnerable families with at least £1,200 of direct payments, starting with the £326 cost of living payment being distributed for the summer holidays.
"Through our £37 billion support package we are saving the typical employee over £330 a year through a tax cut, allowing people on Universal Credit to keep £1,000 more of what they earn while 80 per cent of households are getting a £150 council tax rebate."
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