UK Gov't Urged to Ramp Up Universal Credit as Households Projected to Face 'Eat or Heat' Dilemma

The UK, like many other European countries, saw gas prices spike to record highs in 2021 amid shortages in LNG supplies, a cold winter, and under-filled gas reservoirs. As a result, heating bills are projected to rise sharply in Europe even as some countries try to limit the impact of gas price hikes on residents.

Several British charities have issued a warning to the government that with the current inflation on food and basic necessities and spiking gas prices, many households risk facing a choice between heating their homes and eating a meal. They advised the government to increase social benefits, specifically the Universal Credit payments to help those in need.

Food bank charity, the Trussell Trust, said that it has already witnessed an increased amount of requests for help as the "gap between what [people] can afford and the price of essentials" is growing. The Trussell Trust added that it has braced for a "record" winter.

"I am deeply worried about the cost of living crisis […] There is a large population of people who have very little protection from price increases and can spiral quickly into destitution, meaning they can't afford absolute essentials such as food, heating, lighting, or sanitary goods", director of policy and research at Trussell Trust, Gary Lemon, said.

Several other UK charities, including Save the Children, Shelter, Age UK, and mental health charity Mind expressed similar concerns. Mind pointed out that the government needs to adjust the benefits system so that people with mental health problems can "fully participate in society without being pushed into poverty".

Chief executive of Shelter, Polly Neate, stressed that fuel price hikes and surging inflation may be the last straw that drives many renters out of their homes. The British Retail Consortium earlier predicted that food prices will continue to rise in 2022 and likely at a faster rate than in 2021.

"No parent should have to choose between putting the heating on, food on the table, or paying their rent – but that is the reality for so many families right now", Neate said.

Age UK, in turn, painted an even gloomier picture suggesting that the elderly living off their pensions might not be able to cover heating bills even if they start skipping some of their meals.

Increase to Universal Credit the Only Solution?

The concerns expressed by the charities stem from the projected hike in energy bills in 2022 as a result of spiking prices for natural gas – one of the main sources of power supply in the UK. The British body Ofgem regulates the cap for a bill's growth adjusting the ceiling twice a year to alleviate the impact on energy companies. The last time Ofgem did so in October 2021, the average energy bill jumped by almost 140 pounds ($189) as gas prices in Europe have already started to set new highs.

The upcoming energy bill ceiling review in Spring 2022 might push Britons' costs further up. Most of the charities that raised an alarm on the issue suggested that 10 Downing Street can alleviate the impact on low-income households by returning the £20-per-week ($27) uplift to Universal Credit – monthly payments for those in need of help with living costs.

The UK government first introduced an 80-pound ($108) increase to monthly payments in March 2020 to help those struggling with the impact of the COVID-19 pandemic. However, the move was reversed last autumn amid hopes that the worst part of the pandemic was behind the nation.

The return of the Universal Credit uplift, however, won't affect the struggling elderly, who are not eligible for the payment. Instead, Age UK suggested other measures to help them – a temporary decrease in energy bills for all Britons or the introduction of targeted support for those with low income, for example, via an uplift to the Cold Weather Payment scheme.