A research tank has warned that millions of families will face a “year of the squeeze” in 2022. Higher energy bills, stagnating earnings, and tax increases, according to the Resolution Foundation, may cost homeowners £1,200 per year.
According to the study, the energy price cap and national insurance contributions both increased in April. The government claims to have set aside £4.2 billion to help families.
According to the Resolution Foundation, millions of families will face a “cost-of-living crisis” next year.
A report said, a 1.25 per cent increase in national insurance contributions will cost the average household £600 per year, while an increase in the energy bill cap will cost them £500. Both will take effect in April.
The failure of several energy companies would result in an additional £100 being charged on gas and electricity bills. Customers of defunct energy businesses have been transferred to new suppliers, but this means they may be charged a different and perhaps more expensive tariff than before.
Wholesale gas prices have grown to previously unheard-of heights in recent months. They hit a new high of 450p per therm last week, which experts believe will push typical annual gas bills to almost £2,000 next year.
Meanwhile, according to the Office for National Statistics, the cost of living in the United Kingdom increased by 5.1 per cent in the year to November, the largest increase in ten years.
“The overall image is going to be one of the prices increasing and pay packets stagnant,” said Torsten Bell, chief executive of the Resolution Foundation. Following the end of the government’s furlough scheme on September 30, he added, the UK employment market had shown evidence of resilience during the epidemic, with the unemployment rate close to pre-Covid levels at 4.2 per cent.
On the other hand, while some segments of the workforce have had significant wage increases, such as in demand for HGV drivers generally, the reality is that costs are going up for everyone while salaries are going up for some.