More than 1 million more people will be forced into poverty this winter even if the government freezes energy prices at current levels, according to a conservative thinktank, the Legatum Institute.
It estimated that even if the energy price cap was held at its summer rate of £1,971, another 1.3 million people would slide below the relative poverty line compared with pre-pandemic rates.
With living standards collapsing, many people on low incomes would still struggle with rising costs in other areas such as food, clothing, rent and transport, partly because energy prices were already high, and partly as a result of the government’s decision to award below-inflation benefit increases in April, when benefits were increased by 3.1%, even though inflation was at 9% at the time.
Legatum said government intervention to freeze energy prices was essential to avert what would otherwise be an even more drastic “once in a generation” explosion in poverty.
The institute estimated that if ministers failed to tackle gas and electricity prices, and the energy price cap rose as projected to £3,549 in October and again in January to £5,300, then numbers in poverty in the UK would increase to 16.65 million, compared with the 2019-20 rate of 13.9 million.
“Even under the assumption of energy prices fixed at summer 2022 levels, there will still be 15.2 million people in poverty over the course of 2022-23. This would represent the greatest number of people in poverty since the Social Metrics Commission began measuring poverty in 2000-01, and an increase of 1.3 million when compared with pre-pandemic levels,” the analysis says.