Britain is facing “cost of living catastrophe” – Rishi must help fix it by bringing in these 8 money saving policies
HOUSEHOLD bills are rising fast – with food prices soaring and energy costs set to rocket again.
At the same time, people are feeling the pinch with inflation hitting a 30-year high of 5.4 per cent last month.
And pay packets will be squeezed still further when the increase in National Insurance comes into effect from April.
A new rise in the energy price cap – which determines the maximum amount families pay for fuel – is being announced next week and will likely see bills soar by £600 a year.
Recent data also shows food bills are set to rise by £180 a year. The Sun’s postbags have been full of letters from desperate readers, with many having to choose between heating and eating.
But what can the Government and Chancellor Rishi Sunak do to help cut the costs?
Here, we set out some of his options . . .
1. Give grants to low-income families
FAMILIES are facing a “cost of living catastrophe”, warns think-tank the Resolution Foundation, which calls for grants for struggling homes.
With the poorest third of house-holds spending at least ten per cent of their budget on energy bills alone, chief executive Torsten Bell says a one-off £300 payment to 8.5million low-income households would cost the Government up to £2.5billion.
He added: “It’s a large amount, but it’s the minimum we’re going to need to mitigate rising energy bills.”
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2. Boost winter savings to £500
HARD-UP households can get £140 off their energy bills over winter through the warm home discount – but that is not enough.
The scheme was launched in 2010 at £130 and has barely increased since. Price comparison site Uswitch says it needs to rise to at least £500.
Richard Neudegg, from the site, said: “To ensure households aren’t worse off, the Government would have to increase it by the amount the price cap is set to rise, so it would likely need to be well above £500.”
3. End warm home discount lottery
MORE than a million people are missing out on the warm home discount due to a postcode lottery, uSwitch has warned.
The criteria for qualifying varies between energy firms and currently operates on a first come, first served basis.
Around one million people get the discount automatically. There is enough cash to help another million people, but it is estimated that two million people in need would still be missing out.
4. Ditch the 5% VAT on fuel
HOUSEHOLDS pay VAT on their fuel bills, which is currently set at five per cent.
But with energy prices set to soar by as much as £600 a year, campaigners are calling on Sunak to scrap the VAT charges.
It is a move that would save around £100 on the average annual bill.
The Government, however, is resistant – having previously said it would prefer a more targeted approach that helps just those who need it and not the better off.
5. Scrap National Insurance hike
COME April, workers will be paying hundreds of pounds extra in tax due to a 1.25 percentage point rise in their National Insurance contributions.
This means that those earning £25,000 will pay an extra £193 a year, while those earning £30,000 will fork out an extra £255.
At the same time, income tax thresholds will be frozen, meaning workers will lose out if their wages rise with inflation. Scrapping the NI rise is one way to keep more money in workers’ pockets.
6. Pay childcare benefits upfront
WORKING parents on Universal Credit get 85 per cent of childcare costs back, up to a certain limit.
But this money is paid in arrears and not upfront, as The Sun has demanded in our Make Universal Credit Work campaign.
Victoria Benson, of parenting charity Gingerbread, said: “Many parents can’t afford to pay childcare costs upfront and before they’ve even received their salary. The current situation means many are forced into debt or out of work altogether.”
7. Cut duty on petrol
PETROL prices hit a record high last year, with drivers paying an average of 144.9p a litre. Diesel soared to 148.84p a litre.
The fuel supply shortage did not help matters but fuel duty currently accounts for around 57.95p of every litre you buy.
While the Government scrapped a rise in the duty, in a win for The Sun’s Keep It Down campaign, it could go further – and a cut to this tax would put hundreds of pounds back in motorists’ pockets.
8. Stop green levies on energy bills
ALL energy suppliers over a certain size have to contribute to building a future away from fossil fuels – but this means charges of around an extra £159 on your bills.
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These green levies will rise to around £200 when the energy price cap increases again.
Sam Hall, director of the Conservative Environment Network, said: “The Government can’t control global gas prices, but to help with rising bills it could cover the cost of some of the levies from Treasury coffers.”