Chancellor Rishi Sunak faced pleas to extend the £20-a-week boost to Universal Credit as millions of households face being landed with an inflation-shattering energy price hike.
Industry regulator Ofgem today gave energy suppliers the green light to unleash the biggest bill shock in a decade.
Around 11 million households on standard or default tariffs are to be hit with an average £139 a year rise.
But another four million households on pre-pay meters will see bills jump even more, by £153, despite often being elderly and vulnerable.
Campaigners warned the timing was a “perfect storm” for those already struggling after the pandemic.
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The price rises kicks in on October 1, the day after the Government is due to pull the plug on the temporary £20-a-week UC uplift.
James Plunkett, executive director at Citizens Advice, said: “This price hike could lead to a perfect storm for families this autumn, hitting people at the same time as a Universal Credit cut and the end
of furlough.”
Peter Smith, from fuel poverty charity National Energy Action, said: “The toxic combination will lead to a further surge in utility debt.”
Jonathan Marshall, senior economist at think-tank the Resolution Foundation, called on the Government to reverse the removal of the £20 UC uplift and “offer targeted support to families at risk of falling into fuel poverty”.
Ofgem is tasked with setting price caps for half of Britain’s households twice a year. The latest £139 increase is on top of a £96 rise allowed in April.
Ofgem said suppliers were justified in raising prices because of a more than 50% leap in wholesale energy costs in the past six months, with gas hitting a record high.
However, the new cap will allow suppliers to make an average £22.86 profit on every customer impacted.
The rises will take the average household default tariff bill to £1,277 a year and £1,309 for those on pre-payment plans.
Ofgem chief Jonathan Brearley said: “The timing and size of this increase will be particularly difficult for many families still struggling.”
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