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Stop the poverty premium

Today saw the release of a new brief by Save the Children called the UK Poverty Rip Off, showing how the poverty premium levied at the poorest households has gone up from £1,000 and now stands at nearly £1,300.
Lack of access to the best online prices, bank accounts and managing their budget via cash all adds together to give the poorest families the worst deals around. The result is a poverty premium that costs the poorest families more for the same energy, cookers and household items, credit and insurance than their wealthier peers.

One of the biggest increases has been the cost of energy. Poorer families pay hundreds of pounds extra to heat their homes with an annual average cost for gas and electricity of £1,135 compared with £880 for other families.

For most people it’s a struggle when the first bills arrive just after Christmas, but for the poorest families this is going to be an even tougher time. We’ve seen freezing temperatures, much snowfall and, according to the Met Office, December 2010 was one of the coldest months in a hundred years. To levy a poverty premium on top because you’re poor just isn’t fair.

Families who can’t afford to heat their homes properly could be putting their children’s health at risk. Evidence provided in this report shows that cold living conditions increase children’s susceptibility to illness, compromise healthy weight gain and respiratory problems. It can even impact on how well children do at school as children need a warm, peaceful space to do homework.

A voluntary scheme introduced by the last government asked energy companies to do more for vulnerable people, including poorer families, with the cost of heating. But only one of the big six companies introduced a social tariff that included low-income families. Now the coalition government wants to remove the social tariff and introduce a rebate scheme to help vulnerable groups, again under a voluntary scheme with the energy companies. But this means that, once again, the poorest families could be left out in the cold.

We want Chris Huhne, Secretary of State for Energy and Climate Change, to make it law that all vulnerable groups — including the poorest families — are included in the rebate scheme. There has to be a fairer system that doesn’t penalise the poorest families and impact on the lives of their children. One way of making it better would be for the poorest families to be guaranteed the Warm Home Discount rebate.

Find out more about the UK poverty rip-off

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