Soaring energy bills leave families with less for luxuries

Many households are now spending almost half their disposable income - after housing - on basics like food, energy, petrol and clothing.

According to the Resolution Foundation, the poorest half of working-age families are spending 49% of their non-housing budgets on essentials.

That’s up from 42% in 2002.

As a result, many families are facing what the Resolution Foundation has called a “comfort crunch” - where they have less left over for fun activities like holidays and eating out.

“This has happened despite the cost of some essentials being kept low,” said economist Lalitha Try.

“Food in Britain is still cheap by international standards and the cost of clothing has fallen by a third.”

However, she said energy costs have been “the big exception”, as prices rose “gradually” in the 2000s and 2010s and then “much more quickly” in the 2020s.

Energy costs are 150% higher than in 2000

Figures from the Resolution Foundation show that in real terms, energy costs today are about 150% higher than they were in 2000.

The cost of gas and electricity doubled in real terms between 2000 and 2019.

And then between 2019 and 2023, it went up by a further 71%.

The Resolution Foundation has now called on the government to do more to help people struggling with their bills.

“Ministers can better protect households from these energy price pressures by providing a discount for those on low incomes that goes beyond those on means-tested benefits,” Ms Try said.

“Such a scheme needn’t cost much in normal times, but could be ramped up if another energy price shock comes around.”

The Resolution Foundation added that this approach would be much more cost-effective than the universal energy bill reductions given out during the last cost-of-living crisis, which cost a total of £37bn.

What to do if you’re struggling with your bills

If you’ve fallen behind with your energy bills, you may be able to get a grant to help you pay off what you owe.

Grants are available from energy companies and charitable trusts.

Find out more here.

It’s also well worth checking to see what government support you might be eligible for.

Use our benefits calculator or get in touch to find out what you could claim.

And don’t forget to check out our handy tips on how to use less energy, as that can also help you bring down your bills.