LONDON, January 17, Reuters - The proportion of British households struggling with energy bills will triple in April when regulated prices look set to rise by more than 50%, the Resolution Foundation said on Monday.
The think tank said Britain's government will need to spend more than 7 billion pounds $9.6 billion this year if it wants to offset the effects of soaring energy prices for households.
The rising cost of living is under pressure on Prime Minister Boris Johnson's government. The Bank of England predicts that annual consumer price inflation will hit a 30 year high of around 6% in April.
The number of families suffering from 'fuel stress' to treble to more than six million households this summer is due to rising gas prices, according to the economist Jonny Marshall, who said the number of households will go up as a result of rising gas prices.
The think tank estimated that households spending more than 10% of their income on electric and heating bills will triple to 27% in April, a threshold used to define 'fuel poverty' in Scotland, Wales and Northern Ireland.
Many smaller utility companies have collapsed as wholesale energy prices have risen faster than the maximum tariffs they are allowed to charge, which are updated twice a year.
The Resolution Foundation said that the average household energy bill will go up to 2,000 pounds a year in April.
The impact of this for the poorest households would cost 2.5 billion pounds, through a 300 pound increase to an annual grant and expanding it to the poorest 8.5 million households. The think tank said that the measure would reduce the number of households in 'fuel stress' by 1 million.
A further measure - deferring utility company failures charged to household bills and using general taxation instead of energy bills to fund climate change mitigation - would cost 4.8 billion pounds and reduce the number of households in 'fuel stress' by an extra 1.7 million.