Resolution Foundation says £4.4bn energy support is poorly targeted
The Resolution Foundation says the £4.4bn cost of living package in John Healey’s budget is poorly targeted. It estimates that support will leave typical energy bills higher in real terms than during the 2022-23 energy price shock, even for households receiving help.
The poorest half of households are forecast to gain an average of £158 from support this year and next, only £14 more than the richest half. Typical energy bills after support are expected to be £1,750 in 2026-27, compared with £1,685 in 2022-23; the analysis also projects working-age households’ disposable incomes will fall by £1,050, or 3%, between 2026-27 and 2028-29.
In short
- The Foundation says £4.4bn of support is spread too thinly.
- The poorest half gain only £14 more than the richest half.
- Typical energy bills are forecast to exceed 2022-23 levels.
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The case for
Support should be directed towards households least able to absorb high energy costs, so a package that gives the poorest half only slightly more than the richest half may be an inefficient use of public money. With bills still forecast to exceed their 2022-23 level in real terms and working-age incomes projected to fall, advocates of better targeting could argue that help should be more closely tied to need.
The case against
Broad energy support can be simpler to deliver and can protect households who are under financial pressure but do not qualify for means-tested help. More targeted schemes risk excluding people whose circumstances are difficult to capture, while the package may still offer some relief against higher bills even if it does not fully restore purchasing power.
Explained simply
Energy bills have risen sharply in recent years, putting pressure on household budgets. The government can use public money to help people pay for energy, but deciding who qualifies and how much they receive affects how widely that help is shared.
The Resolution Foundation is an independent research organisation that studies living standards and the economy. John Healey is the minister named in the report; the figures compare the estimated help for households at different income levels and forecast how bills and incomes may change over time.
The issue matters because energy costs take up a larger share of income for many poorer households, while public support also has a cost to taxpayers. Comparing bills and disposable incomes over several years helps show how much pressure households may continue to face.
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Originally published by The Guardian as “Healey’s £4.4bn cost living support package ‘badly targeted,’ says Resolution Foundation – business live”.