More than 830,000 low-income households are set to miss out on the additional help announced by John Healey in last week’s Budget, according to new analysis.
The Chancellor allocated £2.6billion to provide £100 payments for up to 20 million households in council tax bands A to D, aiming to help families facing sharply higher energy bills.
Mr Healey said the measure, partly funded through a new levy on banks, would “take the pressure off in the coldest months and see people through to the Spring”.
However, campaigners have warned that the support is both poorly targeted and too limited to shield households from the significant increase in energy costs expected in January.
Ofgem’s price cap increased by 3.6 per cent to £1,723 for a typical household on October 1, while a further rise of around 22 per cent has been forecast for the New Year.
The £100 payment is also expected to direct more funding towards the North and Midlands than the South East, where fewer properties fall within council tax bands A to D.
More than 830,000 low-income households are expected to miss out on the additional support announced by John Healey in last week’s Budget, new analysis suggests
The Government’s own estimates suggest the £100 payment will reach just 88 per cent of households in the bottom three income deciles and 83 per cent of “fuel-stressed” households.
An analysis by the Policy In Practice think tank found that 838,000 households currently receiving Council Tax support will not qualify for the extra help announced by Mr Healey.
The research used administrative data from a representative sample of local authorities through the Low Income Family Tracker (LIFT) analytics platform.
“Council tax bands are an imperfect proxy for household needs,” the think tank said.
“Low-income households can live in larger properties assigned to higher council tax bands, and often have little choice over the size or band of the home they are allocated.
“Increasingly, several families or generations are also sharing a home in order to keep costs under control.”
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Policy in Practice found that a low-income family of five or more people is 1.6 times more likely to live in a council tax band E-H property than the average low-income household.
As a result, more than 130,000 larger low-income households are expected to miss out on the payment this winter, it said.
Deven Ghelani, director of Policy in Practice, said: “More than 800,000 low-income families are going to miss out on this vital relief from high energy bills.
“Millions of people are [also] missing out on more than £24billion in [wider] support that goes unclaimed each year because of low awareness, administrative complexity and stigma.”
He described the situation as “shocking at the best of times, but unforgivable in a cost of living crisis”, and called on ministers to do more to help people access the support available.
Policy in Practice found that 84 per cent of households excluded from the £100 payment either live with a disabled person, have children or are below the poverty line.
The think tank also said lower-income households are less likely to pay their bills by direct debit, meaning they will not receive the money automatically.
It warned that many low-income households are overdrawn, meaning a payment designed to go towards energy costs will merely go towards existing debt.
In his Budget, Mr Healey also announced the scrapping of standing charges on gas bills.
But Ruth Curtice, chief executive of the Resolution Foundation, has been among those to criticise the Chancellor’s measures as ‘terribly badly targeted’ in the face of ‘really catastrophic forecasts for living standards’.
She said it was ‘a relatively small Budget and arguably one that did not live up to the scale of the challenges that Britain faces’.
A Government spokesman said: ‘Tackling the affordability crisis is our priority, which is why we’re giving families immediate breathing space.
‘From January, millions of households will receive £100 towards their energy costs, alongside action to make bills fairer, including removing standing charges from gas bills and supporting those in energy debt.’