London Daily

Focus on the big picture.
Friday, Aug 22, 2025

Energy bills after Truss freeze will eat up as much as 32% of budget for poorest

Energy bills after Truss freeze will eat up as much as 32% of budget for poorest

Recalculations made for the Guardian are based on Ofgem and ONS data, and follow announcement of bailout

The move to freeze energy bills at an average of £2,500 a year means the poorest households will spend as much as 32% of their entire budget on gas and electricity, though the previously announced £400 discount will help relieve some of the financial pain, figures produced for the Guardian show.

However, up to 47% of their total budget would have been swallowed up by energy bills if Ofgem’s price cap had leapt 80% to £3,549 a year in October, as was originally planned.

The latest calculations were done by the investment platform Interactive Investor on Thursday after the government’s announcement of a bailout, and are based on figures from the energy regulator and family spending data from the Office for National Statistics.

Interactive Investor originally crunched the numbers on 26 August, the day Ofgem announced the £3,549 price cap. On Thursday, the platform reran the calculations to reflect the bailout.

Alice Guy, a personal finance expert at Interactive Investor, says that while many Britons would breathe a sigh of relief, a lot of families would end up paying more, or less, than the £2,500 figure in the headlines. The cap is what an household consuming the average amount of energy on a dual-fuel tariff would pay. Larger households and those with bigger or poorly insulated properties consume more energy and could end up paying perhaps £3,400 or more, she adds.

The recalculated figures can be compared against ONS family spending data for 2021, when energy spending accounted for 8% of the total household budget for those in the poorest decile of the population, 6% for those on middle incomes (the fifth income decile) and 3% for the richest households.


Small house or flat with one or two people


The recalculations show that for those in the bottom-income group, the amount they typically spend on energy as a proportion of the total household budget will now rise to 16%. Without the freeze, and assuming the 80% price cap rise had gone ahead on 1 October, it would have been 23%.

For a middle-income family it will now be 8%, rather than 11%, while for those in the top income decile, it will be 3%, instead of 5%.


Medium house with two or three people


For those in the bottom 10% by income, energy will now typically swallow up 23% of their total household budget (it would have been 33% under the Ofgem price cap).

For those in the middle-income bracket, it will be an estimated 11% (instead of 16%). For the most financially comfortable households it will typically be 5% (instead of 7%).


Larger house with four or more people


For those in the bottom income group, a larger property and more people is likely to mean that more energy is used, thus bigger bills.

The calculations indicate that almost a third – 32% – of their total household budget will now be swallowed up by energy costs (it would have been 47%).

For a middle-income household, the new percentage will be 16% (instead of 23%). For those in the very top income bracket – who are most able to withstand bill shocks – the new figure is estimated to be 7% (instead of 10%).

Newsletter

Related Articles

0:00
0:00
Close
After 200,000 Orders in 2 Minutes: Xiaomi Accelerates Marketing in Europe
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×