Low-income households across the UK could be missing out on an average saving of at least £350 per year due to a ‘postcode lottery’ of social tariffs, according to a new report.
Citizens Advice found that identical households are receiving “completely different” levels of support depending on where they live, with nearly £2billion worth of assistance going unclaimed.
Dame Clare Moriarty, Citizens Advice chief executive said: “Worrying numbers of people continue to be forced to take drastic measures, like cutting back their spending on water and energy, in the face of unmanageable essential costs.”
The report revealed that £1.9bn is sitting unclaimed across water and broadband schemes alone due to lack of consistency and effort to promote social tariffs among suppliers.
Moriarty added: “Social tariffs have a crucial role to play in shielding low-income households from unaffordable bills. But, for too long, people have been in the dark about extra financial support available to them.”
The report has highlighted a growing crisis in living standards, with half of British adults – approximately 25 million people – cutting back on essential bills such as water, broadband, car insurance, and energy in the past year.
Almost one in seven respondents reported taking drastic measures that have negatively impacted their lives
PA
Almost one in seven respondents reported taking drastic measures that have negatively impacted their lives.
Some have resorted to disconnecting their home broadband and relying on public Wi-Fi, while others have cancelled car insurance, affecting their ability to commute to work.
With utility bills only expected to increase further over the coming years, research by one of Citizens Advice’s partners, the Institute for Public Policy Research (IPPR), has painted a grim picture for the future and found that growing numbers of households will spend a disproportionate amount of their money on essentials.
An estimated 2.8 million households are expected to spend a fifth or more of their disposable income on water, energy, and broadband costs over the next 12 months.
This represents a significant 27 per cent increase since 2021-22, according to Henry Parkes, principal economist at the IPPR.
Parkes said: “Growing numbers of households are spending inordinate amounts on the essentials, highlighting that although inflation may have slowed, higher prices are here to stay.”
Citizens Advice has called for immediate government action to address this issue.
The charity suggests that ministers could take steps “without having to spend a penny” by putting the onus on suppliers to make sure people eligible for social tariffs are rightfully receiving them.
The organisation also recommends improved data-sharing between Government departments and firms to facilitate this process.
Furthermore, Citizens Advice is urging an end to the postcode lottery for water and broadband social tariffs. They advocate for consistency across markets, bringing these in line with other schemes such as energy.
The charity’s frontline staff report that many people in need of support are unaware that social tariff schemes exist. Those who are aware often encounter difficulties accessing them.
An adviser from Dover, Deal and District Citizens Advice said: “You have to really jump through some high hoops for the social tariff. It’s not something that any of my clients have ever been able to do without help.”
Moriarty emphasised: “Solutions to this are hiding in plain sight. Putting money back into the pockets of people who need it most starts with the Government ending unfair postcode lotteries in social tariffs.”
