Around 1.1 million claimant families receiving tax credits will get their first Cost of Living Payment from Friday 2 September 2022, HM Revenue and Customs (HMRC) has confirmed.
This £326 UK Government payment will be paid automatically into eligible tax credit-only customers’ bank accounts between 2 and 7 September 2022. The first HMRC payments will total around £360 million.
Nadhim Zahawi, Chancellor of the Exchequer, said:“I know people are really concerned by rising prices so I’m glad that over a million more low earners will shortly receive their first Cost of Living Payment. We are also preparing options for further support so the new Prime Minister can hit the ground running.
“Alongside £400 off most people’s energy bills, tax cuts and the Household Support Fund, these direct payments are a very important part of our £37 billion package of help for households, which is targeted at those who need it most.”
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:“This first Cost of Living Payment will provide vital financial support for eligible tax credit-only claimants across the UK. A second payment will be made to eligible customers from the winter.
“The money will be paid automatically into bank accounts, so people don’t need to do anything to get this extra help.”
These latest payments mean that more than eight million eligible households in receipt of a means-tested benefit will have received the first of two automatic Cost of Living payments of £326 from 14 July.
The second means-tested payment of £324 will be issued later this year – from the autumn for DWP benefit claimants, and from the winter for tax credit-only customers.
Tax credit claimants who also receive benefits from the Department for Work and Pensions will have already received their first Cost of Living Payment from July 2022.
The Cost of Living payments from the UK Government are part of a £37 billion package of support, which will see millions of low-income households receive at least £1,200 this year to help cover rising costs.
As well as the Cost of Living Payment, other UK Government support includes:
£400 discount from the government to help with the cost of energy bills from October onwards
£300 Pensioner Cost of Living Payment that will be paid alongside Winter Fuel Payments
£150 Disability Cost of Living Payment from 20 September for those receiving an eligible UK disability benefit.
This is all in addition to changes to the Universal Credit taper rate and work allowances worth £1,000 a year on average for 1.7 million working claimants; a rise in the National Living Wage to £9.50 an hour; and a tax cut for around 30 million workers through a rise in National Insurance contribution thresholds.
The UK Government is offering help for households. Customers should check GOV.UK to find out what cost of living support they could be eligible for.
Energy price hikes will cause ‘stress, anxiety, illness, debt and death’
Today (26 August) Ofgem has announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022.
This comes as Ofgem’s CEO warns of the hardship energy prices will cause this winter and urges the incoming Prime Minister and new cabinet to provide an additional and urgent response to continued surging energy prices.
The increase reflects the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and have been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.
The price cap, as set out in law, puts a maximum per unit price on energy that reflects what it costs to buy energy on the wholesale market and supply it to our homes. It also sets a strict and modest profit rate that suppliers can make from domestic energy sales. However, unlike energy producers and extractors, most domestic suppliers are currently not making a profit.
The price cap protects against the so called ‘loyalty premium’ where customers who do not move suppliers or switch to better deals can end up paying far more than others. Ultimately, the price cap cannot be set below the true cost of buying and supplying energy to our homes and so the rising costs of energy are reflected in it.
Although Ofgem is not giving price cap projections for January because the market remains too volatile, the market for gas in Winter means that prices could get significantly worse through 2023.
Jonathan Brearley, CEO of Ofgem, said:“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
“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.”
Ofgem will continue to work with government, consumers groups, charities and suppliers, in supporting any new package of help or measures to ease the crisis.
Ofgem has also today strengthened the rules around direct debits to ensure suppliers set them at the right level, meaning that customers only pay exactly what they need to. The changes will stop suppliers from building up excessive customer credit balances and using them in a risky way as working capital.
Ofgem’s clear role is to protect consumers, and it has also today:
Strengthened requirements for suppliers to have sufficient control over the key assets they use to run their businesses. Together, this and the direct debit rule changes build on existing requirements to boost supplier resilience to better protect customers from costs associated with supplier failures.
Extended the Market Stabilisation Charge (MSC), which is paid by suppliers and helps protect customers from the cost of supplier failure.
Extended the ban on acquisition only tariffs which ensures all energy tariffs are available to existing as well as new customers, ensuring all consumers can get a fair deal on their energy.
Launched a review into the mechanism and level of profit margin available under the price cap to ensure that suppliers do not earn excessive profits and receive only a fair return for the services they provide to customers.
The new price cap level will take effect from 1 October 2022, but it is possible some suppliers may begin increasing direct debits before this date to spread costs. Customers worried about when their direct debit will increase should contact their supplier. Any money taken from customers to build up a credit will only ever be spent on their energy supply and customers can ask for their credit balance to be returned at any time.
Anyone worried about paying their bill should contact their supplier in the first instance. They are obliged to discuss payment plans and direct customers to government and third sector support where available. Ofgem is tightly monitoring suppliers’ performance in this area and has told all suppliers now is the time to step up their support for customers, especially those on low incomes or in a vulnerable situation.
Ofgem continues to monitor the impact of the price cap and to work with stakeholders and government on what more can be done for those least able to pay but most in need of energy.
When the new Prime Minister announces what additional support packages will be available, Ofgem will continue to examine how best it can help those groups of people that need it the most.
Reacting to today’s announcement by Ofgem, Poverty Alliance director Peter Kelly said: “The first moral duty of government is to protect people and provide them with security. The UK Government and Ofgem are failing badly in that duty and acting without any sense of compassion and justice.
“This massive price hike is in line with predictions. Ministers knew this was coming for months but have put nothing in place to prevent a humanitarian disaster.
“We must be clear. Bills of this size will be completely and utterly unaffordable for people on low incomes, many of whom have already been struggling with cuts to social security and huge wage squeeze for years and years. They will cause stress, anxiety, illness, debt and death.
“The UK Government must act now. It is simply not right that they continue to dither – prices must be frozen and targeted support must be put in place to help those most in need.”
Chancellor of the Exchequer, Nadhim Zahawi said:“I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
He later told the public to cut back their energy consumption – this from the man who once claimed parliamentary expenses for heating his stables!
This morning, Ofgem announced that the energy price cap will rise by 80%, taking typical household bills from £1,971 a year to £3,549 a year on 1 October.
People will rightly be worried by these huge price hikes. These eye-watering increases will simply be unaffordable for households up and down the country.
We’re demanding the government increase its support package for every household to at least £1,000, with extra support for the most financially vulnerable, or risk pushing millions of households into financial distress this winter. We also expect energy suppliers to ensure their customer service centres are adequately resourced to resolve queries quickly and help those struggling to pay their bills.
THE Government needs to spend £100 billion to freeze household energy prices for a year, according to an industry expert.Derek Lickorish, chairman of retailer Utilita Energy, told GB News: “Back in the banking crisis, Gordon Brown found £500 billion pounds to stop the banks falling apart and I’m advocating that we’re looking at about £100 billion to freeze prices for one year.
“At the moment, we don’t know what Liz Truss is bringing to the party and we don’t know whether it’s going to meet the size of the gap.
“While we have a price cap , when we get to the first of January, that figure is going to have a five in front of it, and it’s going to be another couple of thousand pounds and people cannot possibly afford to pay that amount of money for their energy bill.”
Speaking to Alastair Stewart on GB News, he added: “I think the area that needs to be looked at quite closely is the market structure, in terms of the way electricity is bought and sold, and I know there are plans to look at this now with some urgency.
“But you have a situation where you’re bringing on to the network power that has been effectively subsidised by the renewables obligation, yet they are getting these huge prices in terms of generation because the market price is set by gas.
“The wind doesn’t cost any more. The sun doesn’t cost any more. But these schemes are making an awful lot of money.
“To be fair, that’s about solutions that were brought in prior to 2017, so there was a change so that renewable projects from 2017 would get the price that they agreed.”
Asked to make a final point, Mr Lickorish said: “I want the Government to tell us what’s happening and it needs to be a very, very big number that we need to know now.
John Redwood MP, who has been tipped for a post in a new administration, suggested that VAT on energy will be scrapped for businesses when a new Prime Minister is in place.
“Cancelling VAT on fuel, at least temporarily while fuel costs are elevated, is a serious runner and any new government team will want to look at that,” he told Liam Halligan on GB News.
“I certainly agree with you that there are a lot of businesses under a lot of pressure and I think that must be part of a comprehensive package to explain to industry what help might become available.
“And what can be done about the excessive fuel bills that will directly now lead to some closures, as we’ve heard recently.”
Commenting on the energy price cap rise announced today, Crispin Truman, chief executive of CPRE, the countryside charity, said: ‘This winter’s energy bills are a ticking time bomb threatening to blow apart household finances.
“Rural areas, where wages are lower and homes often cost more to heat, will be devastated if the full force of the price rises are felt by consumers. The government must step in to prevent those living in the countryside from having to choose between eating and heating this winter.
‘We’ve been here before in the pandemic – the country is entering a national crisis that requires an emergency response. Ministers must urgently put in place direct financial support to get people through the winter, while working to deliver the only viable long term solution – improving the energy efficiency of our homes.
‘In addition to stratospheric energy bills, the cost of living crisis is being driven by a lack of housing and soaring rents for millions in the private rented sector. Homelessness is rising as half a million people languish on social housing waiting lists. In the Eden district of Cumbria, homelessness rates are more than four times what they were in early 2020.
‘Twiddling with taxes won’t cut it. To ease the cost of living crisis the government needs to provide immediate monetary support. To prevent a generation of rolling winter crises, we need to get off gas and rapidly invest in home insulation and cheap renewable energy. A longer term fix must also include providing many more social and affordable homes.’
National charity, Family Fund,has welcomed the Government’s one-off £150 cost-of-living payment for 6 million disabled adults and children from September, but warns more support will be needed given today’s uplift of the Energy Price Cap.
Cheryl Ward, Family Fund Chief Executive, said: “We know that current severe inflationary pressures are affecting millions of people across the land, but for families caring for disabled and seriously ill children, who have even greater costs, the outlook is very grave. The choices between putting food on the table, paying for energy or clothing and sensory equipment are stark”.
Family Fund, the UK’s largest grant-making charity for families with disabled or seriously ill children and young people, acknowledges that the much-needed Government cash will go some way to ease the burden of bills, as the cost of living soars, but that more support will be needed in the coming months.
The charity provides essential items for families on the lowest incomes, including kitchen appliances, clothing, bedding, play equipment and much-needed family breaks.
Parents and carers raising a disabled or seriously child can face costs some three times higher than for other families. A grant from the charity can make all the difference for parents; helping to relieve their everyday stresses by providing essentials needed to care for their children.
“We very much welcome this latest £150 payment from Government”, said Cheryl Ward, “but we know from the increasing calls we are now getting from our families, facing spiralling costs on every front, that more support will be needed. We are therefore, along with other charities, asking ministers to consider urgently how future support can be given.”
In recent research, three quarters of families supported by Family Fund say their financial situation has worsened significantly since the pandemic.
Even before today’s Energy Price Cap uplift, two thirds of families with disabled children are struggling to pay energy bills and nearly one quarter say they are already falling behind with bills.
The cost of living crisis is, therefore, hitting many who are already in an extremely financially vulnerable position.
£1.2 million to ensure households and businesses get support
Immediate funding is being awarded to key energy advice organisations to make sure energy customers can access crucial support and advice to deal with rising energy bills and heating costs.
More than £1.2 million will be distributed to help key agencies, including Advice Direct Scotland, Home Energy Scotland and Citizen’s Advice Scotland, reach more people who need help.
The funding will also support a training programme for staff from third sector organisations to expand the reach of expert advice.
The Scottish Government committed to providing additional support to advice agencies at the Scottish Energy Summit hosted by the First Minister on Tuesday 23 August, at which a series of further actions to mitigate the energy price rises were agreed with energy companies and advice organisations.
The additional funding announced today is on top of the Scottish Government’s existing investment in free income, welfare and debt advice services, including support to Money Advice Scotland and the Welfare Advice and Health Partnerships Programme.
Minister for Zero Carbon Buildings and Tenants Rights Patrick Harvie visited Home Energy Scotland’s Edinburgh offices to speak to advisors who have been supporting households.
Mr Harvie said: “We know that this is an incredibly unsettling time for all households and businesses and it is imperative that those worried about or struggling with heating their homes access the information and support they need to reduce their energy bills.
“A further energy price cap increase announcement will only serve to escalate concerns, making the need for impartial, expert advice and support even more vital.
“The Scottish Government is clear that energy customers simply cannot be expected to carry the burden of further price rises in October, and that the UK Government must now commit to freeze the cap for all households and to support energy companies to deliver that.
“In the meantime, the cost crisis is already hitting energy customers hard and the Scottish Government will continue to do everything within our means to support the people of Scotland through it.
“This funding will ensure that expert advisors across the country stand ready to provide crucial support and guidance to those understandably worried about their energy bills. I would urge everyone who has concerns to access these services and get the support they need.”
A total of £1.268 million will be distributed across energy advice services as follows:
£220,000 to Advice Direct Scotland to fund new staff in its contact centres for consumers, including vulnerable consumers, in need of help.
£50,000 to Advice Direct Scotland to create a user-friendly online digital journey for customers
£220,000 to Citizen’s Advice Scotland to enhance capacity in their local advice bureaus enabling them to provide advice on both energy debt and energy efficiency measures.
£280,000 to expand the Home Energy Scotland advice Service
£198,000 for Home Energy Scotland recruits who will provide training to staff from third sector organisations on energy efficiency, which will see around 200 local community groups and organisations benefit
£300,000 to enhance support for businesses through Business Energy Scotland
The Scottish Government estimates that 906,000 or 36% of all households will be in fuel poverty in October 2022, based on an Ofgem price cap of £2,800 and taking into account previously announced government mitigations.
The Scottish Government has allocated almost £3 billion in this financial year that will help households face the increased cost of living. This includes the provision of services and financial support not available elsewhere in the UK that is helping to reduce everyday costs and increase incomes.
It also includes £10 million to continue the Fuel Insecurity Fund which helps households at risk of severely rationing their energy use, or self-disconnecting entirely. This includes direct support for households using any tariff or fuel type, and is delivered via trusted third sector partners the Fuel Bank Foundation, Advice Direct Scotland and the Scottish Federation of Housing Associations.
Aldi supported charities in Edinburgh during the school summer holidays by donating more than 8,800 meals to people in need.
The supermarket paired its stores up with local charities, foodbanks and community groups via community giving platform Neighbourly to donate surplus food to good causes.
Since the partnership with Neighbourly began in 2019, Aldi’s UK stores have already donated more than 25 million meals to over 3,600 local causes.
Liz Fox, Corporate Responsibility Director at Aldi UK,said: “Our food donations scheme with Neighbourly operates year-round, but we know that school holidays are a particularly hard time for families, especially as many continue to experience greater hardship due to the cost-of-living crisis.
“This is why we committed to supporting even more amazing causes in Edinburgh over the school holidays, helping them to provide meals to those who needed them most.”
Steve Butterworth, from Neighbourly, added:“School holidays are often a time when demand on charities and foodbanks drastically increases, particularly during summer when children are at home for six weeks or more.
“This push in donations from Aldi was therefore essential in helping these organisations support families during this time.”
The Scottish Government, energy companies and advice organisations met at Bute House yesterday (Tuesday 23rd August) for a summit chaired by First Minister Nicola Sturgeon – but it’s the UK Government that will have to act to head off a financial crisis for families across the country.
During the meeting a consensus emerged around next steps that must be taken by the UK Government, and where further work and action will take place between energy companies, advice organisations and the Scottish Government ahead of a follow up meeting next month.
The First Minister said: “Any further increase in energy bills in October will have a profound impact on households, businesses and the public sector already struggling with the cost crisis.
“No single government, company or organisation can solve this crisis alone. It requires a collective response commensurate to the situation and the Scottish Government is now treating this situation as a public emergency.
“There was clear consensus at today’s summit that energy customers simply cannot be expected to carry the burden of further price rises in October, and that the UK Government must now commit to freeze the cap for all households and to support the energy companies to deliver that.
“This meeting was focussed on practical solutions, but without action by the UK Government to address the problem at source, the actions we discussed can only ever mitigate the impact of such dramatic price rises at the edges.
“I am grateful to energy suppliers and our third sector partners for coming to the table today and for committing to work together with the Scottish Government to develop further action and practical steps to help households and businesses through the cost crisis.”
The consensus reached in the meeting was that the UK government should:
Immediately cancel any further energy price increase for domestic consumers, and work with the regulator and energy companies to put in place the funding to support this;
Provide significant additional support to help households and businesses meet current energy bills and the impact of inflation more generally;
Take action to protect small and medium sizes businesses, and other organisations not covered by the price cap, from rising energy costs;
Reform the energy market for the longer term to prevent this situation occurring again in the future.
The following actions to mitigate the current situation were also agreed and will be developed further:
Energy companies will pursue all possible options to provide enhanced support to consumers who are in difficulty, including working with advice agencies and government to improve the support available to consumers, and protect customers from disconnection. It was agreed that the energy companies will work with the Scottish government over the next two weeks to agree a package of measures;
The Scottish Government will provide additional support to advice agencies and consider, as part of its emergency budget review, further support for households and businesses. It will also undertake a public information campaign to promote energy efficiency measures alongside sources of help and support for those in difficulty;
This group will reconvene following the announcement by Ofgem of the new price cap on Friday 26th August and the appointment of a new Prime Minister to determine further specific actions.
The Chancellor is in Edinburgh today to showcase the support the UK Government is providing the people of Scotland through a £37bn package.
It comes after July’s National Insurance Contribution threshold rise for workers across Scotland, putting £330 back into the pockets of a typical employee this year and saving households over £260m.
The Chancellor will also be meeting leaders of Scotland’s green energy industry, emphasising our drive to improve Britain’s energy security.
The Chancellor will today reaffirm the UK Government commitment to help the people of Scotland with rising costs in the coming months, as it continues to deliver its £37bn package of support.
On a visit to Edinburgh, Nadhim Zahawi will also emphasise the UK Government’s commitment to energy security and making sure we have the green supplies of power we need for the future.
He will be meeting some of the figures who have led Scotland to the cutting edge of green power generation technology, as well as apprentices starting out in the industry. His visit will take in one of Scotland’s leading companies in the field of tidal energy as well a windfarm capable of providing power to up to 11,000 homes.
This comes in the same week that Chancellor began a series of meetings with energy generation companies as part of ongoing discussions on what more the industry can do to ensure markets function effectively for consumers.
The visit comes as the UK government is providing 689,000 households in Scotland with the £650 cost of living payment as well as £400 to help people with their energy bills, from October, over the winter months. It has also committed an extra £82 million for the Scottish Government to help vulnerable families at their discretion – in addition to the significant income tax and welfare powers they already have.
The UK Government has also launched the Review of Electricity Markets Arrangement to address higher energy costs, the need to boost energy security and the need to move the UK to a cleaner energy system as well as the Energy Security Bill, the most ambitious piece of legislation in the sector for more than a decade.
Zahawi is also sitting down with the leaders of Scotland’s financial services industry, which employs thousands of people in Scotland. He will listen to their concerns and emphasise the UK Government’s commitment to the sector.
The Chancellor will also meet performers from the world-famous Royal Edinburgh Military Tattoo.
Chancellor of the Exchequer, Nadhim Zahawi, said: “I know families across Scotland are feeling anxious about rising costs and the UK Government has stepped in to ease pressures on household budgets.
“We delivered an unprecedented level of support in July with a National Insurance cut that will put £330 back into workers’ pockets this year, while many of Scotland’s most vulnerable households have already received the first instalment of a £650 Cost of Living Payment.
“And there’s more to come. Not only will the second instalment of that payment arrive this autumn, but I’ve been clear that we are absolutely committed to bringing an equivalent to the £400 energy bills discount to Northern Ireland as soon as possible to ease the burden on families.
“We will continue to help support families in Northern Ireland through the global pressures we are all facing.”
The UK Government has provided a record £41 billion annual settlement for the next three years and we will continue to work collaboratively with them.
£150 disability Cost of Living payments to be made from 20 September 2022
6 million people who are paid certain disability benefits will benefit
Automatic support part of wider package of help with the rising Cost of Living, including other cost of living payments totalling £650
Those being paid a qualifying disability benefit will be paid automatically from 20 September, with the vast majority of those eligible expected to receive their one-off payment within a couple of weeks by the beginning of October.
The payment will help disabled people with the rising Cost of Living acknowledging the higher disability-related costs they often face, such as care and mobility needs.
For those disabled people on low-incomes, this payment comes on top of other Cost of Living payments totalling £650, £400 for all households to help with energy bills, and an extra £150 for properties in Council Tax bands A-D in England.
Over eight million eligible households in receipt of a means-tested benefit received the first of two automatic Cost of Living payments of £326 from 14 July. The second means-tested payment of £324 will be issued later this year.
Minister for Disabled People, Health and Work Chloe Smith said: “We know disabled people can face additional costs, which is why we are acting to help reduce the financial pressures on the most vulnerable.
“This £150 disability payment is on top of the £1,200 most low income benefit claimants will also receive and alongside wider support targeted at disabled people, including help with transport and prescription costs.
“We know it’s a worrying time for some people and I’d urge them to check they are getting all the support on offer by searching Help for Households.”
The Cost of Living payments from the government are part of a £37 billion package of support, which will see millions of households receive at least £1,200 this year to help cover rising costs.
The government has also expanded support for the Household Support Fund in England – which helps people with food and energy bills – with an extra £421 million – for October 2022 to March 2023, and topped up funding by £79 million for devolved nations; the total value of this support now stands at £1.5 billion.
This is all in addition to changes to the Universal Credit taper rate and work allowances worth £1,000 a year on average for 1.7 million working claimants, a rise in the National Living Wage to £9.50 an hour, and a tax cut for around 30 million workers through a rise in National Insurance contribution thresholds.
UK Chancellor of the Exchequer Nadhim Zahawi said: “We know that rising prices faced by many countries around the world are a significant worry for many people here in the UK, especially those most vulnerable to additional costs.
“Today’s announcement that disabled people will begin to receive an additional £150 payment from the end of September reinforces our commitment to help UK households through the challenging times ahead.
“This payment is in addition to further help households can expect over the coming months – including a second cost of living payment of £324 for households on means-tested benefits, £300 for pensioners this winter and £400 discount on energy bills for every household. This is all part of our significant £37 billion support package.”
Those who receive the following disability benefits may be eligible for the one-off payment of £150 in September: Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Scottish Disability Benefits (Adult Disability Payment and Child Disability Payment), Armed Forces Independence Payment, Constant Attendance Allowance and War Pension Mobility Supplement.
Armed Forces Independence Payment, Constant Attendance Allowance and War Pension Mobility Supplement.
Those who had confirmed payment of their disability benefit for 25 May are expected to be paid shortly after the payment window opens. For those awaiting confirmation of their disability benefits on 25 May, or who are waiting to be assessed for eligibility to receive disability benefits, the process may take longer but payments will still be automatic.
You must have received a payment (or later receive a payment) of one of these qualifying benefits for 25 May 2022 to get the payment.
A new report from Citizens Advice Scotland (CAS) details the breadth and depth of the cost of living crisis, with soaring energy bills driving “frightening” demand for advice around food insecurity.
The charity is publishing a quarterly cost of living analysis looking at advice demand. It found that in more than 1 in 10 utilities cases, the client also required advice around food insecurity such as a food bank referral.
Comparing the first quarter of this year to the previous financial year, the analysis also shows soaring views of online advice in energy areas such as:
Across the CAB network itself, last year 26% of all utilities advice related to cost of living or income crisis measures. In the first quarter of this year that had grown to 35%.
Last year 36% of finance and charitable support advice was food bank referrals or shopping vouchers. In quarter one of this year this had grown to 45%.
The report also analyses demand across demographics, and finds that council rented tenants and those out of work, or unable to work, are seeking advice related to the cost of living at higher levels than other groups.
The charity is warning that this increased demand is before the impact of a “toxic cocktail” this winter of the energy price cap going up, higher inflation, and increased interest rates.
Citizens Advice Scotland Chief Executive Derek Mitchell said:“The Citizens Advice network gives a wraparound service when people come to us for advice because people have complex problems and need help with multiple issues. Our data tracks the patterns and connections between the advice we are giving out and the problems society faces. What we are seeing is frankly frightening.
“More than one in every ten people seeking help with an energy issue also requires help with food insecurity. Let’s be absolutely clear what that means – some people face the prospect of freezing or starving this winter.
“This crisis is affecting everyone, but some people are especially at risk – our data shows higher demand for advice from council tenants, those out of work and those unable to work. That to me suggests broad support alone will not be enough – there needs to be targeted help for the vulnerable.
“We are seeing these issues before a toxic cocktail this winter of soaring energy bills, growing inflation and higher interest rates. People are hanging on by their finger tips and it’s the summer – how are they expected to cope when the temperature drops and bills rise?
“CABs are here for people during this crisis. We helped 171,000 people last year and a further 2.5 million checked our online advice. We are for everyone regardless of background or circumstance and it’s so important people understand we are here for them with free, confidential and impartial advice. We don’t judge, we just help.
“That help though, needs to be back up by policymakers delivering the kind or urgent and significant policy interventions to help people. Make no mistake, this is a challenge on a scale of the 2008 financial crisis or the 2020 pandemic, and will require solutions to match that.”
Commenting on Tuesday’s labour market figures published by the ONS, which show real wages falling by 4.1 per cent (on CPI measure) as the cost of living crisis intensifies, TUC General Secretary Frances O’Grady said: “Everyone who works deserves financial security.
“But with the Bank of England predicting the worst decline in real pay for 100 years, energy bills soaring and a recession on the horizon, millions of working families are worried they won’t be able to keep their heads above water this winter.
“We need action from ministers now. They should cancel the increase to the energy price cap. And they must do far more to get pay rising – starting with boosting the minimum wage this autumn and giving public sector workers a decent pay rise.”
Zero-hours contracts
Commenting on the latest data on zero-hours contracts also published by the ONS yesterday, which show more than one million people are employed on these terms, Frances added: ““The government promised a high skill, high wage economy.
“But too many workers are stuck on insecure contracts that give them and their families no security. As the cost of living crisis escalates, the case for banning hated zero-hours contracts is stronger than ever.”
