More than three million worst hit families will be forced to shell out £2,000 more on their energy bills after government support was scaled back, new analysis shows.
Research by The Resolution Foundation also found that workers are £15,000 worse off a year on average because of an unprecedented wage downturn which will see salaries drop to 2008 levels for the next five years.
The think-tank estimates that Jeremy Hunt's decision to slash universal support and to scale back the Energy Price Guarantee means that typical households will have just 30% of soaring bills offset.
However that figure is higher for the poorest fifth, who will have 48% of their bills supported.
Researchers also concluded that £15 billion of cuts to capital investment mean large chunks of the government's Levelling Up agenda have been binned.
James Smith, Research Director at the Resolution Foundation, said: “As an energy importer during an energy price shock, Britain is getting poorer.
"Deciding how we do so was, to a significant extent, the choice facing the Chancellor.
"He has decided that households will do so with higher energy bills, higher taxes, and worse public services than previously expected. Whether or not making the choices was tough, the reality of living through the next few years will be.”
Personal tax rises announced yesterday are set to deliver a permanent 3.7% income hit to typical households, the Foundation said in its overnight analysis of the Autumn Statement.
Analysts ruled the Office for Budget Responsibility's weaker forecast for pay means that real wages are now not expected to return to their 2008 level until 2027.
If wages instead continued to grow at their pre-crisis rate, they would be £292 a week – or £15,000 a year – higher.
In its report, the foundation said the end of universal support and the scaling back of the Energy Price Guarantee (EPG) means households will be "far more exposed" to rising energy bills next year.
This means that support will offset just 30% of the rise in energy bills between 2021-22 and 2023-24 for the typical household - rising to 48% of the rise for the poorest fifth of households.
Mr Hunt yesterday announced targeted payments for the worst-off, but it prompted fears that millions would fall through the cracks.
Even after the new EPG and Cost of Living Payments, around one-in-eight families - a massive 3.3 million - will be paying over £2,000 more next year than they were in 2021-22, the foundation concluded.
Tax rises account for the vast majority of tightening – totalling £68 billion a year, or £2,300 per household, by 2027-28.
A typical household faces a permanent 3.7 per cent income hit – the same as the top fifth of households – and bigger than the 3% income hit that the very top twentieth of households will face.
