Energy prices 'rising eight times faster than earnings'

The charity's chief executive Gillian Guy wants Government levies on bills to be scrapped, warning families will reach "crisis point" this winter as they struggle to heat their homes and eat (join our free Cheap Energy Club to permanently save on gas and electricity).

Citizens Advice has calculated that the big six energy firms have raised prices by a total of 36% on average since October 2010, while earnings have increased by just 4.4% for the same period.

Gas and electricity price increases of three times the rate of inflation are now commonplace. But the new figures show how the comparison with household incomes, which are below the inflation rate, is even more stark.

Calls to Citizens Advice's consumer helpline about energy issues have doubled since Scottish and Southern Energy (SSE) became the first big six firm to announce price increases in October (see the SSE to raise energy prices MSE News story).

More and more likely to reach 'crisis point'

Guy is urging the Government to continue supporting poorer households and vulnerable pensioners, but energy companies claim the levies added to bills to fund energy efficiency measures for these customers are largely to blame for the huge price hikes.

Prime Minister David Cameron announced last month that he would look into rolling back green levies, and a change in policy is widely expected to be announced by Chancellor George Osborne in his autumn statement on 5 December (see the Energy firms will face 'competition test' MSE News story).

Guy says: "Enormous escalations in energy prices are creating a desperate situation in many households.

"People find they do not have enough money coming in to pay for everyday essentials, as increases in daily costs are outstripping low rises in earnings.

"As we head into winter, and the latest price rises begin to kick in, more and more people are likely to reach crisis point as they struggle to heat their homes and feed their families."