A one-off £400 discount on energy bills will be too little, too late to offset vast price rises, middle-class families have said.
Homeowners have told Telegraph Money that they cannot afford to wait until the autumn to receive a penny from the Chancellor’s £15bn cost of living support package announced on Thursday.
Previously households stood to benefit from a £200 energy bills loan, but this sum has now been doubled and will not have to be repaid. It comes after the regulator, Ofgem, warned the energy price cap would rise for the second time this year to £2,800 before winter, making average household energy bills around £1,500 higher than in 2021.
The support will be paid via energy companies and funded by a one-off 25pc windfall tax on oil and gas firms, which have made vast profits from the global energy supply crisis. It will come on top of the £150 council tax rebate announced at the start of the year for homes in bands A to D. It means there is up to £1,650 of support available to the most vulnerable households on the lowest incomes.
However, the Chancellor’s cost of living crisis support package, broken down in the graphic below, will cover just a fraction of the cost increases that middle-class families face this year.
Jenny Holden, 47, from Staffordshire, said the financial support was just a “drop in the ocean”. She said she needed the help now and would struggle with rising costs over the next five to six months.
“We are already being hit by the double whammy of rising food and petrol prices and are really feeling the shockwaves of that,” she said. “We are a family of four – I have two 11-year-old sons – and filling up the car and buying a bag of shopping is off the scale for us. It feels like we’re in a recession. We can’t afford to go on holiday this half term and you feel that pressure as a parent.”
Pat Mulligan, 49, a father of four from West Yorkshire, said the support would not “touch the sides” and he was already paying an extra £600 for his food, petrol and heating every month than he was last year.
He said: “My dual energy bills were £80 a month – they are now £230 a month. My weekly road fuel bill was £60 a week and is now £120 a week. Our weekly food shop has increased from £120 to over £180 in weeks. Thankfully, I am self-employed and can increase my income to suit my circumstances, but it’s a terrifying nightmare for those on fixed incomes or the retired.”
The combined £550 from the energy bill grant and council tax rebate represents just 14pc of the extra costs that families face. Analysis by this newspaper found that middle-class households were grappling with bill increases of almost £4,000 this year as inflation soars.
Rail fares, which are linked to inflation, have increased by 3.8pc, adding £194 to the cost of an annual season ticket between Brighton and London. Households on variable mortgages with £250,000 outstanding have seen their annual repayments increase by £1,872 as official interest rates have risen to 1pc from record lows of 0.1pc.
Meanwhile, average annual food bills are £271 higher, according to researchers Kantar, while council tax for the average band D property is up by £67 for the year.
Chris Steele, 37, from Dorset, who runs his own insurance business, said he also faced increasing care costs for his two children. He said: “This £400 helps for sure, but it’s not enough. If inflation keeps going the way it is, people like us will need a lot more support later.” Households earning £60,000 face a monthly income shortfall of £172 as price rises have caused average spending to overtake their after-tax income, according to analysts NimbleFins.
Middle and high earners are also increasingly turning to debt while they await financial support. The number of people earning more than £60,000 a year seeking help from the debt advice helpline PayPlan has risen by 13pc since the start of the pandemic.
Consumer credit debt is now growing at an annual rate of 5.2pc, up from 4.7pc at the start of the year and the highest level since before coronavirus, according to the Bank of England.
Households are borrowing about £1.5bn each month. It means Britain’s overall credit card bill is expected to rise by a fifth to almost £70bn over the next six months as families attempt to plug gaps in their finances.
Sue Anderson, of debt charity StepChange, warned that more and more middle earners would be dragged into lasting debt problems as they were increasingly forced to eat into their savings.
Wealthy families have even resorted to pawning their belongings to make ends meet, according to James Constantinou of Prestige Pawnbrokers. It has made loans on assets worth about £1m this month, secured against art collections, Ferraris, Rolls-Royces and luxury watches.
“Our inquiries have more than doubled since the start of the year, and people need cash now,” he said. “These middle and high earners have told us they are struggling to pay the bills. No one is immune from rising prices; business owners, entrepreneurs and even those with a lot of investments will really feel the pinch.”
Shock as the comfortably off find they can no longer afford to maintain their standard of living. My heart breaks.
Where I live I fall into Band E yet the others are all D so no money for me!
Is the proposed £400 based on Council Tax Bands?
When the gov need to give you 150 off council tax and 400 off utilities, then you should know two things (1) something is very wrong with the UK economy (2,) something is very wrong with government.
it can’t really be expected and there is no bottomless pit of money. Middle class people worrying about higher petrol costs can trade stuff down, e.g. smaller car, move to smaller, cheaper house – so it’s a bit much to expect some gigantic benefits handout to fund a middle class lifestyle.
Very weird article, yes the standard of living is presumably falling.
The government was so scared of everything collapsing during the pandemic that they have set a precedent to give the middle class money whenever they feel they need it.
People at the very bottom of society have been struggling since the tories got into power and no-one batted for them.
Whilst this government would never do it, I felt the right play was to freeze the cap. Let the energy companies take the hit and we would see inflation come down.
The U.Ks inflation figures are much higher than France mainly because of energy prices.
I don’t think people understand the level of mess having stupidly low interest rates for many years combined with the pandemic spending have caused. Combine with that Brexit, supply issues and the war in Ukraine and there is a tsunami of problems all hitting the fan at the same time.
The next year is going to be tough and the middle classes may have to suck it up like the poorest have had to over the last 12 years.
Jesus Christ how long will this shit go on. First lockdown furlough now this…
What the middle class need is to be given nothing but have their insane taxes cut and for there to actually be the slightest bit of reward for working hard, personal responsibility etc
If the “Squeezed middle class” needs £4000, fuck knows how much the lower class needs.
People don’t like to use the term “lower class” but the reality is that 33% of us are living in it.
If you don’t have £4000 to spare you’re not middle class in the first place.
I’m still paying €680 a year on electricity in Ireland. Some of my friends in UK are paying that in 2 months
Im lucky to be in a 2 median income household with no kids. 1 month off council tax and £400 is actually fk all.
Besides its not like you see the £400. Its just taken off bills that have already gone up more than that and will do again in winter.
So it actually works out as bills going up massively, but a little bit less.
Its giving someone a step stool when they are down a well.
>My dual energy bills were £80 a month – they are now £230 a month. My weekly road fuel bill was £60 a week and is now £120 a week. Our weekly food shop has increased from £120 to over £180 in weeks.
Energy prices haven’t tripled. Petrol has gone up a lot but it hasn’t doubled. Food is going up but it hasn’t gone up by 50%.
Sounds like something else has changed for this guy, not just prices going up.
With all the fistings those poor ol brits have been receiving since bwexit even if you rolled it up and inserted it sideways it still wouldn’t touch the sides.
If the middle class needs 4000£…. Guess how much lower class needs…
Oh, those poor mites.
Can’t possibly cut out Wilomena’s fucking piano lessons can we?
You are not actually middle class if you need money from the government for anything.
Should’ve owned 10 houses.
Be prepared for a disaster in the making whenever the Government coughs up dough, it eventually rises the stress and anxiety by those who received it, start stocking up on toques,gloves,batteries insulated socks, the winter of discontent is coming and it’s going to be severe.
This is the shape of things to come.
The Conservatives/LibDems in coalition created something very regressive, basically the state may as well not exist when it comes to the general public.
That’s a problem for the middle-class since they can’t survive as “the middle-class” without the state.
If middle earners have Rolex’s and Ferraris to pawn then I’ve just realised I’m definitely not a middle earner.
Sad the comments from people belittling the middle income, lower and middle income people spend their money in the same pool middle income start buying less that’s less income all round. More I pay for fuel the less I spend in Tesco, less people spend in Tesco it’s the staff who suffer first – gross simplification but you get the idea.
Lower income get benefits to help but for how long, squeezed middle made poorer by the top but hated by the bottom suddenly voting for less benefits to decrease their tax bill gets really tempting other than Brexiteers and nationalists who do you think the majority of Tory voters are?
> Pat Mulligan, 49, a father of four from West Yorkshire, said the support would not “touch the sides” and he was already paying an extra £600 for his food, petrol and heating every month than he was last year.
Rough numbers. Assume worst case inflation of 25% on all of these items. So this chap *has* been spending ca. £2000 per month on food, petrol and heating, in order to see a £600 increase. (If the increase is closer to ONS figures at 10%, then he’s spending £6k per month! So let’s be very pessimistic here.)
No breakdown on the exact costs, but if it’s a third each way, then he’s driving (at 30mpg) about 3,500 miles a month (42k/year) or about 5x the average motorist, spending about 50% more than the average family-of-six on food (typical cost £400/m), and spending ~£600 on heating per month. These are all *pre-inflation*.
On the heating: If he’s gas-heated then that’s 75,000kWh/year at current capped rates (it would have been lower pre-April, but let’s be extra pessimistic.) That’s just ludicruous – for comparison Ofgem suggest 12,000kWh/year for a typical house. Someone might spend a little more for a bigger house, but 8x more does seem extreme. Few boilers could even burn that much gas per year; it’s basically 8.5kW load continuously on heating, so a typical boiler would be running at 60-70% duty cycle, winter and summer.
Maths does not check out, Pat.
What we need is caps and to re-nationalise and properly fund key services.
It’s not going to get better.
Energy is never going to be as cheap as the previous generation have gotten used to.
Boomers chose not to invest in long-term renewable energy sources when times were good.
They traded our future energy security away so as to benefit immediately from slightly lower energy prices.
Well here we are.
Gas supplies have become unreliable, and climate change is snapping at our heels.
We’ve got no choice now but to pay decades of sky high energy bills, whilst Countries scramble to build the renewable energy replacements we should have all been building through the 90s and 00s.
Just another “got mine, f*** you” from Boomers to their young, along with not building any housing.
Obviously most of us could do with more, but I could also have had a lot less, so the £400 is very welcome.
Won’t someone please think of the middle class!
My parents are upper/middle class & they don’t need shit…I do
People might scoff at the middle class needing help but it means that those who previously had the most disposable income will now be saving it all for a rainy day. That money will not be invested back into the economy and it will be those who work low paid jobs that will be laid off first should companies need to downsize. The middle class also have the spare income to donate to charity, that will also no longer be donated as frequently or to the same extent. Squeezing the middle class will have a knock-on effect on working class people too.
Meanwhile I’m just glad I’m getting anything.
Was kinda expecting I wouldn’t qualify for any of these schemes
Seems odd to hear about richer people complain they are not getting enough handouts, when I don’t get any at all.
Classic torygraph, get the little people arguing amongst themselves about benefit payments again.
£400 won’t touch the sides
The sides? What sides?
Just to clarify – Middle Class in the UK is more dependant on your working circumstances than your income. I’m on office worker and my wife is a teacher, both salaried. That qualifies us as middle class.
My mate who’s an electrician is self employed and takes money per job, which qualifies him as Working Class.
One of us drives a Porsche Caymen and goes on holiday abroad every 6 months. Hint: it’s not me or my wife.
Middle Class =/= wealthy, just like Working Class =/= poor.
32 comments
A one-off £400 discount on energy bills will be too little, too late to offset vast price rises, middle-class families have said.
Homeowners have told Telegraph Money that they cannot afford to wait until the autumn to receive a penny from the Chancellor’s £15bn cost of living support package announced on Thursday.
Previously households stood to benefit from a £200 energy bills loan, but this sum has now been doubled and will not have to be repaid. It comes after the regulator, Ofgem, warned the energy price cap would rise for the second time this year to £2,800 before winter, making average household energy bills around £1,500 higher than in 2021.
The support will be paid via energy companies and funded by a one-off 25pc windfall tax on oil and gas firms, which have made vast profits from the global energy supply crisis. It will come on top of the £150 council tax rebate announced at the start of the year for homes in bands A to D. It means there is up to £1,650 of support available to the most vulnerable households on the lowest incomes.
However, the Chancellor’s cost of living crisis support package, broken down in the graphic below, will cover just a fraction of the cost increases that middle-class families face this year.
Jenny Holden, 47, from Staffordshire, said the financial support was just a “drop in the ocean”. She said she needed the help now and would struggle with rising costs over the next five to six months.
“We are already being hit by the double whammy of rising food and petrol prices and are really feeling the shockwaves of that,” she said. “We are a family of four – I have two 11-year-old sons – and filling up the car and buying a bag of shopping is off the scale for us. It feels like we’re in a recession. We can’t afford to go on holiday this half term and you feel that pressure as a parent.”
Pat Mulligan, 49, a father of four from West Yorkshire, said the support would not “touch the sides” and he was already paying an extra £600 for his food, petrol and heating every month than he was last year.
He said: “My dual energy bills were £80 a month – they are now £230 a month. My weekly road fuel bill was £60 a week and is now £120 a week. Our weekly food shop has increased from £120 to over £180 in weeks. Thankfully, I am self-employed and can increase my income to suit my circumstances, but it’s a terrifying nightmare for those on fixed incomes or the retired.”
The combined £550 from the energy bill grant and council tax rebate represents just 14pc of the extra costs that families face. Analysis by this newspaper found that middle-class households were grappling with bill increases of almost £4,000 this year as inflation soars.
Rail fares, which are linked to inflation, have increased by 3.8pc, adding £194 to the cost of an annual season ticket between Brighton and London. Households on variable mortgages with £250,000 outstanding have seen their annual repayments increase by £1,872 as official interest rates have risen to 1pc from record lows of 0.1pc.
Meanwhile, average annual food bills are £271 higher, according to researchers Kantar, while council tax for the average band D property is up by £67 for the year.
Chris Steele, 37, from Dorset, who runs his own insurance business, said he also faced increasing care costs for his two children. He said: “This £400 helps for sure, but it’s not enough. If inflation keeps going the way it is, people like us will need a lot more support later.” Households earning £60,000 face a monthly income shortfall of £172 as price rises have caused average spending to overtake their after-tax income, according to analysts NimbleFins.
Middle and high earners are also increasingly turning to debt while they await financial support. The number of people earning more than £60,000 a year seeking help from the debt advice helpline PayPlan has risen by 13pc since the start of the pandemic.
Consumer credit debt is now growing at an annual rate of 5.2pc, up from 4.7pc at the start of the year and the highest level since before coronavirus, according to the Bank of England.
Households are borrowing about £1.5bn each month. It means Britain’s overall credit card bill is expected to rise by a fifth to almost £70bn over the next six months as families attempt to plug gaps in their finances.
Sue Anderson, of debt charity StepChange, warned that more and more middle earners would be dragged into lasting debt problems as they were increasingly forced to eat into their savings.
Wealthy families have even resorted to pawning their belongings to make ends meet, according to James Constantinou of Prestige Pawnbrokers. It has made loans on assets worth about £1m this month, secured against art collections, Ferraris, Rolls-Royces and luxury watches.
“Our inquiries have more than doubled since the start of the year, and people need cash now,” he said. “These middle and high earners have told us they are struggling to pay the bills. No one is immune from rising prices; business owners, entrepreneurs and even those with a lot of investments will really feel the pinch.”
Shock as the comfortably off find they can no longer afford to maintain their standard of living. My heart breaks.
Where I live I fall into Band E yet the others are all D so no money for me!
Is the proposed £400 based on Council Tax Bands?
When the gov need to give you 150 off council tax and 400 off utilities, then you should know two things (1) something is very wrong with the UK economy (2,) something is very wrong with government.
it can’t really be expected and there is no bottomless pit of money. Middle class people worrying about higher petrol costs can trade stuff down, e.g. smaller car, move to smaller, cheaper house – so it’s a bit much to expect some gigantic benefits handout to fund a middle class lifestyle.
Very weird article, yes the standard of living is presumably falling.
The government was so scared of everything collapsing during the pandemic that they have set a precedent to give the middle class money whenever they feel they need it.
People at the very bottom of society have been struggling since the tories got into power and no-one batted for them.
Whilst this government would never do it, I felt the right play was to freeze the cap. Let the energy companies take the hit and we would see inflation come down.
The U.Ks inflation figures are much higher than France mainly because of energy prices.
I don’t think people understand the level of mess having stupidly low interest rates for many years combined with the pandemic spending have caused. Combine with that Brexit, supply issues and the war in Ukraine and there is a tsunami of problems all hitting the fan at the same time.
The next year is going to be tough and the middle classes may have to suck it up like the poorest have had to over the last 12 years.
Jesus Christ how long will this shit go on. First lockdown furlough now this…
What the middle class need is to be given nothing but have their insane taxes cut and for there to actually be the slightest bit of reward for working hard, personal responsibility etc
If the “Squeezed middle class” needs £4000, fuck knows how much the lower class needs.
People don’t like to use the term “lower class” but the reality is that 33% of us are living in it.
If you don’t have £4000 to spare you’re not middle class in the first place.
I’m still paying €680 a year on electricity in Ireland. Some of my friends in UK are paying that in 2 months
Im lucky to be in a 2 median income household with no kids. 1 month off council tax and £400 is actually fk all.
Besides its not like you see the £400. Its just taken off bills that have already gone up more than that and will do again in winter.
So it actually works out as bills going up massively, but a little bit less.
Its giving someone a step stool when they are down a well.
>My dual energy bills were £80 a month – they are now £230 a month. My weekly road fuel bill was £60 a week and is now £120 a week. Our weekly food shop has increased from £120 to over £180 in weeks.
Energy prices haven’t tripled. Petrol has gone up a lot but it hasn’t doubled. Food is going up but it hasn’t gone up by 50%.
Sounds like something else has changed for this guy, not just prices going up.
With all the fistings those poor ol brits have been receiving since bwexit even if you rolled it up and inserted it sideways it still wouldn’t touch the sides.
If the middle class needs 4000£…. Guess how much lower class needs…
Oh, those poor mites.
Can’t possibly cut out Wilomena’s fucking piano lessons can we?
You are not actually middle class if you need money from the government for anything.
Should’ve owned 10 houses.
Be prepared for a disaster in the making whenever the Government coughs up dough, it eventually rises the stress and anxiety by those who received it, start stocking up on toques,gloves,batteries insulated socks, the winter of discontent is coming and it’s going to be severe.
This is the shape of things to come.
The Conservatives/LibDems in coalition created something very regressive, basically the state may as well not exist when it comes to the general public.
That’s a problem for the middle-class since they can’t survive as “the middle-class” without the state.
If middle earners have Rolex’s and Ferraris to pawn then I’ve just realised I’m definitely not a middle earner.
Sad the comments from people belittling the middle income, lower and middle income people spend their money in the same pool middle income start buying less that’s less income all round. More I pay for fuel the less I spend in Tesco, less people spend in Tesco it’s the staff who suffer first – gross simplification but you get the idea.
Lower income get benefits to help but for how long, squeezed middle made poorer by the top but hated by the bottom suddenly voting for less benefits to decrease their tax bill gets really tempting other than Brexiteers and nationalists who do you think the majority of Tory voters are?
> Pat Mulligan, 49, a father of four from West Yorkshire, said the support would not “touch the sides” and he was already paying an extra £600 for his food, petrol and heating every month than he was last year.
Rough numbers. Assume worst case inflation of 25% on all of these items. So this chap *has* been spending ca. £2000 per month on food, petrol and heating, in order to see a £600 increase. (If the increase is closer to ONS figures at 10%, then he’s spending £6k per month! So let’s be very pessimistic here.)
No breakdown on the exact costs, but if it’s a third each way, then he’s driving (at 30mpg) about 3,500 miles a month (42k/year) or about 5x the average motorist, spending about 50% more than the average family-of-six on food (typical cost £400/m), and spending ~£600 on heating per month. These are all *pre-inflation*.
On the heating: If he’s gas-heated then that’s 75,000kWh/year at current capped rates (it would have been lower pre-April, but let’s be extra pessimistic.) That’s just ludicruous – for comparison Ofgem suggest 12,000kWh/year for a typical house. Someone might spend a little more for a bigger house, but 8x more does seem extreme. Few boilers could even burn that much gas per year; it’s basically 8.5kW load continuously on heating, so a typical boiler would be running at 60-70% duty cycle, winter and summer.
Maths does not check out, Pat.
What we need is caps and to re-nationalise and properly fund key services.
It’s not going to get better.
Energy is never going to be as cheap as the previous generation have gotten used to.
Boomers chose not to invest in long-term renewable energy sources when times were good.
They traded our future energy security away so as to benefit immediately from slightly lower energy prices.
Well here we are.
Gas supplies have become unreliable, and climate change is snapping at our heels.
We’ve got no choice now but to pay decades of sky high energy bills, whilst Countries scramble to build the renewable energy replacements we should have all been building through the 90s and 00s.
Just another “got mine, f*** you” from Boomers to their young, along with not building any housing.
Obviously most of us could do with more, but I could also have had a lot less, so the £400 is very welcome.
Won’t someone please think of the middle class!
My parents are upper/middle class & they don’t need shit…I do
People might scoff at the middle class needing help but it means that those who previously had the most disposable income will now be saving it all for a rainy day. That money will not be invested back into the economy and it will be those who work low paid jobs that will be laid off first should companies need to downsize. The middle class also have the spare income to donate to charity, that will also no longer be donated as frequently or to the same extent. Squeezing the middle class will have a knock-on effect on working class people too.
Meanwhile I’m just glad I’m getting anything.
Was kinda expecting I wouldn’t qualify for any of these schemes
Seems odd to hear about richer people complain they are not getting enough handouts, when I don’t get any at all.
Classic torygraph, get the little people arguing amongst themselves about benefit payments again.
£400 won’t touch the sides
The sides? What sides?
Just to clarify – Middle Class in the UK is more dependant on your working circumstances than your income. I’m on office worker and my wife is a teacher, both salaried. That qualifies us as middle class.
My mate who’s an electrician is self employed and takes money per job, which qualifies him as Working Class.
One of us drives a Porsche Caymen and goes on holiday abroad every 6 months. Hint: it’s not me or my wife.
Middle Class =/= wealthy, just like Working Class =/= poor.