Universal Credit cuts and rising energy bills will force some families to choose between food and heating this winter – with many surviving pay check to pay check.
Tori Oram is one of 1.5million people whose energy supplier collapsed this week.
The mum-of-two, who was a Green customer, will now be pushed onto a new supplier and a tariff that will be hundreds of pounds higher than her current fixed deal.
She says the thought of a higher energy bill coupled with an £80 cut in benefits leaves her ‘terrified’.
The retail manager relocated her family two years ago because they could no longer afford their rent.
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Tori is the sole-breadwinner due to her husband’s spinal condition which has left him barely able to stand. His operation has been postponed due to Covid.
“My income is topped up by Universal Credit. We don't qualify for any help like the warm home discount or free school dinners.
“We normally have about £200 disposable income at the end of each month,” explains Tori.
“This usually goes on clearing the credit card.
“The £80 a month Universal Credit cut, hike in National Insurance and the idea of more expensive energy bills terrifies me.
“We already shop at Lidl. I honestly feel we are looking at a choice between heating and eating this year.
“We expect to have nothing left and we may have to start relying on the credit card again.
“We’ll be living paycheck to paycheck. I think everyone is in for a very tough winter.”
Sandra Hayes from Guildford can’t sleep at night due to her money problems. She says Christmas may not be cancelled, but it will be on a very tight budget this year.
“I'll have less disposable income to spend on food, clothes, travel and essentials,” she said.
“It will eat into the money I set aside to spend on me and the family and other things, even unexpected bills. I'll no doubt be overdrawn each month and I'll have to find ways to make more money.
“It will even impact Christmas gifts this year.
“I'll think twice about putting the heating on and will put an extra layer on instead.
“It makes me feel anxious and it keeps me awake at night - If one unexpected bill comes in or an appliance breaks down, I may have no way of paying to replace or repair.”
Sandra says she will cut costs where she can. She uses voucher codes websites, coupons and budgeting sites like AskBill to regulate her outgoings.
“The rising cost of everything will leave me at least £140 worse off a month,” she said.
Nearly 1.5million households took a hit on Wednesday after two energy firms collapsed under soaring gas prices.
Avro Energy and Green ceased trading and their 830,000 combined customers face being switched to a new, potentially more expensive, provider.
All affected customers will still receive energy while a new supplier is appointed by Ofgem, however they are likely to face a higher tariff due to increased wholesale costs.
The cut comes as six million people will take a Universal Credit cut next month as the Chancellor strips away a £20 a week lifeline from claimants.
It will kick in as 1million people remain unable to work and on furlough due to restrictions while the cost of living is up 3.2%, based on August’s inflation rate.
Workers in the UK will also be hit by a 1.25% increase in National Insurance tax from April next year.
At the same time, the government has said no further Covid help will be extended, despite pleas from charities who warn food banks will face one of their busiest years on record this Christmas.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “This is a hugely unsettling time for millions of energy customers. It’s particularly worrying for many on the lowest incomes who’ll be facing the double whammy of rising fuel bills and a benefits cut.
“With choppy waters ahead, the single best thing the government can do is keep its lifeline of £20-a-week to Universal Credit.
“Ofgem must play its part and continue to provide support and protection - especially for those worried about their finances."
