The number of households in Britain struggling to pay their energy bills is set to triple in April when the nation’s price cap increases.
The number of homes under "fuel stress" - those spending at least 10% of income on energy bills - is estimated to rise to 6.3 million households, according to research from the Resolution Foundation thinktank.
Higher wholesale costs are starting to feed into domestic bills, driving up inflation and threatening to cause a cost of living crisis. The government is in talks with energy companies to try to soften the blow for households already contending with the rising cost of everything from food to fuel.
The number of households under "fuel stress" is expected to leap to 27% in April from about 9% now. The price cap is expected to rise 50% to about 2,000 pounds per year. Ofgem will announce the new price cap level on February 7.
"The sheer scale of energy bill increases mean that fuel stress will no longer be confined to the poorest households," the Resolution Foundation said. "Low- and middle-income families will find it hardest to cope."
Investec Bank has trimmed its estimate for the new price cap level to 1 907 pounds from 1 995 due to softening in energy prices.
"The implications for fuel poverty, discretionary spend and inflation remain," Investec analyst Martin Young said. "Time is running out to find a solution, and failure to do so may see political casualties."