Higher-income households are set to benefit the most from the Government’s new cap on energy prices, think tank finds.
Prime Minister Liz Truss announced last week that annual energy prices for the typical household are to be capped at £2,500 for two years from October 2022.
This means that when combined with the £400 energy bill rebate, the Energy Price Guarantee (EPG) covers 76% of the increase in bills compared to last winter, and it means that prices should remain around their current levels this winter.
An analysis from the Resolution Foundation has concluded that the top fifth of households may gain around £1,300 this winter from the EPG compared to £1,100 for the lowest-income fifth. The disparity is because higher-income households typically use more energy.
The think tank also found that more than one in 10 households will gain over £2,000 from the EPG, while another 13% will gain less than £500.
The total package of support that has been introduced to support household incomes in 2022-23 is broadly equal across the income distribution in cash terms (£2,200), according to the Resolution Foundation.
However, plans to provide further cost of living support by scrapping the rise in National Insurance would skew support towards the very highest income households.
