Low-income households ‘missing out on £2bn of financial support’

An “unfair” postcode lottery means nearly £2 billion of financial support for low-income households is lying unclaimed, Citizens Advice has warned.

Social tariff schemes offer discounts on essentials such as water, gas, electricity and broadband for households who are claiming benefits such as universal credit and income support.

However, Citizens Advice believes customers are receiving completely different levels of support depending on where they live, as social tariffs aren’t being promoted consistently.

This, it said, means £1.9 billion worth of help with water and broadband bills isn’t being claimed, and eligible households are missing out on average savings of at least £350 a year.

Struggling households cutting back spending on essentials

According to Citizens Advice, 25 million adults have trimmed their spending on essential bills, including water, energy and broadband, in the last year.

Dame Clare Moriarty, chief executive of Citizens Advice, described this number as “worrying”, and warned that many people are being “forced to take drastic measures in the face of unmanageable essential costs”.

As a result, the charity wants the government to ensure suppliers give the same level of support to low-income customers regardless of where they live, and are proactive in offering social tariffs to those who need them.

Citizens Advice said this would immediately improve the support available through existing social tariff schemes without extra money having to be spent.

“Solutions to this are hiding in plain sight,” said Dame Clare.

“Putting money back into the pockets of people who need it most starts with the government ending unfair postcode lotteries in social tariffs and putting the onus on suppliers to ensure that people are getting the help they’re entitled to.”

Henry Parkes, principal economist at the Institute for Public Policy Research, added that a growing number of households are spending “inordinate amounts” on household essentials.

“Although inflation may have slowed, higher prices are here to stay, with those on the lowest incomes squeezed the most,” he said.

“Alongside other bold policy action, effective social tariffs could make a real difference in tackling this crisis in living standards."

Who is eligible for social tariffs?

Households can get discounted rates on essentials such as broadband and water if they receive government benefits, such as:

• Income support
• Universal credit
• Pension credit
• Income-based jobseeker’s allowance
• Income-based employment and support allowance

However, applying for a social tariff can be complicated, as there is no single point of contact to find out what you’re eligible for across all services.

That means a person must contact every provider of the services they currently receive to find out if they have a social tariff scheme, or shop around for companies that offer this type of support.

Citizens Advice has suggested that better data sharing between government departments and suppliers could be one way to ensure providers are more proactive in identifying and supporting customers who may need help with their bills.