Support for Rishi Sunak’s energy bills will give wealthy pensioners £ 850 they may not need while low-income families are lost, a new analysis has shown.
A £ 15bn grant package revealed by the chancellor on Thursday will do “tough justice” to some groups, the Resolution Foundation said.
The expert group said the biggest winners are wealthy pensioners, while larger families will see their bills rise further, but they will still receive the same flat rate.
Sunak announced a £ 400 discount on the energy bill for every UK household, as well as specific help for pensioners, who will receive an additional £ 300. This adds to a £ 150 municipal tax cut announced earlier this year.
People who receive disability benefits will receive an additional £ 150, and households that receive other benefits according to resources, such as universal credit, will receive £ 650.
The Resolution Foundation said these measures were “bold and well-targeted”, but that some groups with more needs will see living costs rise faster than others.
A low-income family with three or more children will see their energy bills rise £ 500 more per year than a childless home, but is online to receive the same amount of state support.
Larger low-income families are more likely than others to live in poverty, in part because of the two-child limit on some benefits, introduced in 2014.
The foundation said that increasing the amount paid in benefits would have helped more large families and would have been £ 1 billion cheaper.
The government rejected this approach, in part because it was willing to ensure that any financial support was maintained on a temporary basis.
Paul Johnson, director of the Institute for Fiscal Studies (IFS), warned that aid is likely to be called for again next year because energy prices look set to remain high.
“I think the biggest risk is that the chancellor will be tempted to do it over and over again, and I think if that happens, we could really have a bit of a problem,” he told the BBC’s Today program.
“He has the most extraordinarily difficult decisions to make at the end of this year on public sector wages, and I suspect he will be under pressure again this time next year, when energy prices will still be high.
“I think if you are tempted to keep investing money in an economy where inflation is very high, that becomes a major risk.”
Mike Brewer, chief economist at the Resolution Foundation, praised the government’s support package, but said households would still feel a “tight squeeze” on living costs this year.
“The biggest winners of yesterday’s package are wealthy pensioners, who may not need extra support but can still earn £ 850, while large low-income families may feel harsh justice as their greater use of energy is not reflected in a flat rate.
“Critically, in addition to providing vital support to households this winter, the chancellor confirmed that he would go ahead with what is expected to be the largest increase in benefits in more than three decades, when they are likely to increase by more than one. 9 percent next spring.
“This will provide lasting protection to the poorest households in today’s high inflation.”