Bill reform could save struggling households £950 a year

As people across the country battle an unrelenting living standards crisis, Citizens Advice has revealed reforming bill support across essential markets, including energy and water, could save eligible households a staggering £950 a year. That’s the equivalent of £79 a month, which amounts to an income boost of almost 6% for low-income households.

Citizens Advice’s solution for energy bills alone – to expand the existing Warm Home Discount – would help 5.6 million households save an average of £360 a year. For water, its recommendations to bring in a new, single social tariff – a discounted bill for those who need it – could see 1.9 million households receive a £273 discount each year. It could also pull over half a million (580,000) households out of water poverty.

These latest findings come from the Institute for Public Policy Research (IPPR), as part of a Citizens Advice led-partnership with IPPR and Policy in Practice, looking at improving targeted bill support. The work is focused on regulated markets where social tariffs or targeted bill-support schemes already exist but fall short – energy, water and broadband – and is also examining motor insurance given recent price volatility. Because each market is different, a one-size-fits-all approach won’t work; tailored solutions are needed to ensure support truly meets people’s needs.

These recommendations follow Citizens Advice’s warning that four million people can’t afford essentials, and that the living standards crisis is set to worsen without urgent action.

The charity has also seen the need for targeted bills support growing. So far this year, Citizens Advice has helped 45,000 people with water social tariffs, including WaterSure, (up 13% on the previous year), 30,000 people with the Warm Home Discount and 26,000 people with broadband social tariffs (up 21% on the previous year).

With its latest findings revealing the potential of improved bill support, Citizens Advice is urging the government and suppliers to act now to prevent people spiralling into debt or facing desperate decisions about how to cut back further each month. The charity wants to see any eligible households automatically enrolled for bill support, so nobody misses out.

Dame Clare Moriarty, Chief Executive of Citizens Advice said “With punishingly high bills across the board, it’s inevitable that people are cutting back on essentials, getting into serious debt or facing impossible choices. But the government and suppliers are not powerless in this situation.

“Reforming bill support across essential markets has the potential to protect millions of people from unwavering financial pressure.

“Anyone could find themselves needing a safety net if their circumstances change, and we know from the people our advisers speak to every day just how urgently action is already needed. Nobody should be unable to afford essentials like energy or water. The government must act now.”

Henry Parkes, Principal Economist at IPPR, said “Right now, the cost of living is the public’s number one priority – and that means the government must wage a serious war on rising bills. No one should be choosing between staying warm, having clean water, or staying connected. Sensible, targeted bill support could lift hundreds of thousands of households out of hardship and put money back into the pockets of those who need it most.”

Support across essential markets

Essential bill	What better bill support would look like	Impact	How it would be funded
Water	A single water social tariff, for households with incomes less than £300 per week, or those in water poverty.	1.9 million households save £273 each year, meaning over half a million (580,000) households pulled out of water poverty.	Industry funds bill support, potentially using bill increases or other cost-savings.
Energy	Expand the Warm Home Discount to provide tiered support to different household energy needs.	5.6 million households save an average of £360 a year, meaning 600,000 households no longer spend 10% of their income on energy bills.	His Majesty’s Treasury funds any additional bill support beyond the existing Warm Home Discount.
Broadband	Introduce a new £10 a month voucher for targeted broadband bill support to households receiving means-tested benefits with an income of less than £300 per week.	Internet more affordable for 1 million eligible households. Eligible individuals save £120 a year.	Industry funds bill support, potentially using bill increases or other cost-savings.
Motor insurance	Introduce a new £200 a year voucher to reduce the cost of motor insurance for people on means-tested benefits.	Motor insurance more affordable for 3.2 million eligible households.	Industry funds bill support, potentially using bill increases or other cost-savings.

Big savings for an eligible household