HOUSEHOLDS are set to get upto £350 a year under Rishi Sunak’s £2.5billion plan to address the cost of living catastrophe.
Energy bills are set to rise by a record £693 a year for 22million households as the new price cap was confirmed this morning.
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It means that in April the price cap will be hiked to £1,971 a year.
Chancellor Rishi Sunak announced today that the government would intervene to help curb costs as he addressed the British public in a press conference this evening.
Today he announced;
The proposals mean that up to 28million households are set to be given a £350 average in discounts.
The Bank of England has also updated its forecasts today, hiking interest rates to 0.5%.
Banks are not obliged to pass on any interest rate rises to their customers, but a change can influence the cost of borrowing for loans, mortgages and credit cards.
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Chancellor Rishi Sunak announces rebate plans
Mr Sunak, under pressure to scrap VAT on energy bills, unveiled his “Rebate and Repay” scheme to give every household in the country cash back.
The fresh plans are set to tackle the cost of living crisis with a £200 rebate for energy customers.
Rocketing energy bills have seen hard up Brits face a choice of eating or heating their homes.
Last night, the Resolution Foundation warned up to 6.6 million households could be forced into fuel poverty.
To combat this, he said: “Energy suppliers will apply the discount on people’s bills from October, with the government meeting the cost in full.
“That discount will automatically be repaid from people’s bills in equal £40 instalments over the next five years.”
Energy watchdog Ofgem was forced to bring forward its planned price cap rise on gas and electric bills to today.
Suppliers will be allowed to hike the basic tariff for 22m households from the date, meaning families are set for huge increases in bills.
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A £150 rebate on council tax for everyone on bands A to D was also announced – costing the Exchequer at least £9bn – as an extra measure of support for those on the lowest incomes.
Around 80% of all homes in England will benefit from the initiative.
But it will not need to be repaid by households.
Today has been dubbed Black Thursday as a quadruple whammy of rises were announced:
- Average gas and electric bills hitting £1,971 a year as the Government’s price cap is raised.
- Mortgage payments going up as interest rates double from 0.25 per cent to 0.5 per cent – the second increase in two months.
- Shoppers hit by the highest price rises in nearly a decade
- Petrol prices to rocket to record levels.
Consumer expert Martyn James said: “Whatever you do, don’t panic – there is help out there. But the Government need to know that it’s nowhere near enough for millions of hard-up people.”
Households face a planned rise on National Insurance, council tax hikes and higher energy bills from April 1.
The massive rise in the energy price cap comes as interest rates are set to at least double, clobbering families with bigger mortgage repayments.
The Bank of England’s updated forecasts also mean interest rates have hiked from 0.25% to 0.5%.
For credit card users it means if you have a balance of £2,000, a 0.5% rate rise would increase your interest costs by £10 a year – and if you had £8,000, it would rise £40 a year.
For savers, it means £1,000 in the bank earning interest will earn £5 interest a year.
Elsewhere, the cost of food and petrol are surging too.
Helen Dickinson, chief executive of the British Retail Consortium, said: “January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation.
“Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.”
And the RAC warned that “storm clouds are gathering” over rising petrol prices.
The Government is facing huge anger over the rises.
At the weekend, leading political host Trevor Phillips blasted Foreign Secretary Liz Truss in his Sky News show.
Discussing the National Insurance rise, Mr Phillips said: “In practical terms, for an average household that’s an extra £300 a year, or, according to Office for National Statistics figures, six weeks of shopping at a supermarket.
“That’ll be followed by the energy price rise – another £600, or 12 weeks’ shopping.
“Assuming you don’t want most of the country to spend a third of the year not eating, where are people going to find the money?”
Ms Truss admitted the situation is “very difficult”.
Meanwhile, Tory MP Robert Halfon told Mr Phillips the money should come from other sources.
He suggested imposing windfall taxes on big businesses, particularly oil companies – and said they’ve been “raking it in over past couple of years.”
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