New Ofgem cap means poorest homes to spend up to 47% of budget on energy

theguardian.com:

Some of Britain’s poorest families will see as much as 47% of their entire household budget swallowed up by energy costs this autumn, figures produced for the Guardian show.

The calculations were done by investment platform Interactive Investor on Friday morning, moments after the new energy price cap announcement, and are based on figures from Ofgem and Office for National Statistics (ONS) family spending data.

Households in Great Britain face a leap in bills from October after the regulator raised the price cap, taking the average gas and electricity bill to £3,549 a year.

Alice Guy, a personal finance expert at the platform, said: “The figures are truly terrifying. The rising energy price cap will have a disproportionate and devastating effect on poorer families who will spend a huge proportion of their budget on energy this autumn … Meanwhile, affluent families are better insulated from the effects of the energy crisis. While still painful, they will spend a much smaller proportion of their household budget on fuel this autumn.”

The new figures can be compared against ONS family spending data for 2021 when energy spending as a percentage of a household’s total budget was 8% for those in the bottomtenth of the population, or decile, 6% for those on middle incomes (the fifth income decile) and 3% for the richest households.

This data found that in 2021 the average amount spent weekly on energy by those three groups was £17, £24 and £32 respectively.

The new calculations looking ahead to 1 October onwards show that for those in the bottom income group, the amount they typically spend on energy as a proportion of the total household budget will leap to 23%.

For a middle income family it will be 11%, and for those in the top