Thousands of low income families will soon see household bills higher than their monthly pay, charity Crisis is warning.
The average energy bill will rise by £1,578 a year from October 1, as regulator Ofgem last week announced a rise in its energy price cap.
Crisis said families on the lowest incomes, earning about £12,650 a year, could easily see bills bigger than their monthly pay by January once grocery bills and rent are factored in.
The charity said that even homes with incomes of £22,615 will spend 73 per cent of their take-home pay on energy, rent and food costs, the i reports.
Hundreds of thousands of households face also homelessness this winter due to rising energy bills, Crisis said.
Crisis chief executive Matt Downie said: "The situation could not be more desperate. For the poorest households the combined cost of rent, food and energy will exceed their income by a third.
"People cannot simply be expected to cut back. You can’t cut back on the absolute basics required to survive. Families will be left completely destitute if help is not forthcoming.
"The Government has already waited too long to provide reassurance to anxious households. They must act now to prevent soaring rates of homelessness becoming the tragic legacy of the turbulent economic times we are in.”
Approximately 24 million households are covered by the energy price cap, including four million on prepayment meters.
The huge rise in the price cap will add more pressure on to families already struggling with the cost of living crisis - with campaigners fearing many will be pushed below the poverty line.
Ofgem has urged the the new Prime Minister to announce further financial support - with the price cap rise typically £750 more per year than help measures in May were based on.
Jonathan Brearley, chief executive of Ofgem, said: “The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.
“We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action.
“The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
What is the Ofgem energy price cap?
The price cap sets a limit on the rates a supplier can charge for each unit of gas and electricity you use.
It also sets a maximum rate for the daily standing charge, which is what you pay to have your home connected to the grid.
Despite what its name suggests, the price cap isn’t actually a cap on your energy bill.
The price cap represents a customer with typical usage, paying by direct debit.
This means your total bill is still determined by how much energy you’re using - use more, and you’ll pay more.
The price cap is altered every three months, in January, April, July and October.
This means the next time it will be reviewed will be for the January price cap.
The price cap is based on a number of factors including the wholesale cost of power.
