Postcode lottery of social tariffs means people are in the dark about almost £2bn worth of extra bills support
Half of GB adults cut back spending on two or more essentials, including energy, water, broadband and car insurance, in the last year
Social tariff schemes, which offer discounts for low-income households, could save an average of at least £350 every year in water and broadband for those eligible
Citizens Advice argues suppliers and the government all have a part to play in ensuring social tariffs are proactively offered to people who need them most
With spiralling bills continuing to push more households to the brink, Citizens Advice has revealed that people are in the dark about almost £2 billion of available financial support.
Social tariff schemes, which reduce essential bills for people struggling the most, are currently available in markets like water, energy and broadband.
But a lack of consistency, sufficiency and promotion of schemes by suppliers has created an unfair postcode lottery in which identical households receive completely different levels of support, simply because of where they live. And with £1.9bn sitting unclaimed in social tariffs across water and broadband, a low income household could be missing out on an average saving of at least £350 every year.
Citizens Advice says the government could take an immediate step to improve the support available through existing social tariff schemes without having to spend a penny by putting the onus on suppliers to make sure people eligible for social tariffs are rightfully receiving them.
A growing need for help
In its new report, Citizens Advice found half of GB adults (25 million) cut back their spending on essential bills, such as water, broadband, car insurance and energy, in the last year.
And even more concerningly, almost 1 in 7 people say they have stopped their spending or cut it back to a level that has had a detrimental impact on their lives. This includes people disconnecting from home broadband and instead relying on public Wi-Fi, or cancelling car insurance and not being able to get to work.
With utility bills only expected to increase further over the coming years, research by one of Citizens Advice’s partners, the Institute for Public Policy Research (IPPR), has found that growing numbers of households will spend a disproportionate amount of their money on essentials.
The IPPR found an estimated 2.8m households are expected to spend a fifth or more of their disposable income on water, energy and broadband costs over the next 12 months. That’s 1 million more households since 2021-22.
A hand up, not a hand out
Frontline staff at Citizens Advice say a lot of people in need of support have no idea that social tariff schemes even exist, and even those who are aware encounter difficulties accessing them. But when designed effectively, social tariffs can provide much-needed relief to people’s already stretched budgets.
One adviser from Dover, Deal and District Citizens Advice said: “One of the water companies in our area has social tariffs, and you can also apply for extra financial support. But you have to really jump through some high hoops for the social tariff. It's not something that any of my clients have ever been able to do without help. They have needed me to put in the application, to do the legwork, but they're the lucky ones that have that support.”
Postcode lottery of support
Citizens Advice is warning that in their current form, badly designed social tariffs which have patchwork support available in different areas are falling short of the mark in keeping people connected to essential services. This needs to change as more people feel the pinch, according to the charity.
Citizens Advice argues there are steps the government can take right away to improve the support that’s currently available through existing social tariff schemes. These include:
Ensuring suppliers proactively offer social tariffs to their low-income customers, aided by better data-sharing between government departments and suppliers
Ending the postcode lottery for water and broadband social tariffs, so that the support available to people doesn't depend on where they live and is consistent across markets, bringing it in line with other schemes like in energy
But in the long term, the charity wants to see a broader commitment to improving social tariffs across a wider range of markets, including car insurance, to shield those on low incomes from increasingly unaffordable essentials.
Dame Clare Moriarty, Chief Executive of Citizens Advice, said:
“Worrying numbers of people continue to be forced to take drastic measures, like cutting back their spending on water and energy, in the face of unmanageable essential costs.
“Social tariffs have a crucial role to play in shielding low-income households from unaffordable bills. But, for too long, people have been in the dark about extra financial support available to them, which could ultimately affect if someone keeps warm, or falls into debt on their water bill.
“Solutions to this are hiding in plain sight. 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 IPPR, added:
"Growing numbers of households are spending inordinate amounts on the essentials - highlighting that although inflation may have slowed, higher prices are here to stay, with those on the lowest-incomes squeezed the most. Alongside other bold policy action, effective social tariffs could make a real difference in tackling this crisis in living standards."
-ends-
We give people the knowledge and confidence they need to find their way forward - whoever they are, and whatever their problem.
Notes to editors:
Citizens Advice’s report ‘Securing Life's Essentials: Building a plan for targeted bill support in regulated markets’ can be read online
In partnership with abrdn Financial Fairness Trust, the Institute for Public Policy Research and Policy in Practice, Citizens Advice is undertaking a new research project to build a blueprint for how the new government can best harness the potential impact of social tariffs to solve the cost-of-living equation for struggling households - in both the short and longer-term.
Yonder Data Solutions surveyed 2,093 18+ GB adults between June 24th-25th 2024. All data unless otherwise stated is from this polling omnibus.
Almost half (46%) of people have had to use their savings to pay for essential bills in the last year like water or broadband while one in four (26%) used credit cards, Buy Now Pay Later or their overdraft.
15% of people have fallen behind on one of their energy, water, broadband or car insurance bills in the past 12 months.
14.8% say they have stopped their spending or cut it back to a level that has had a detrimental impact on their lives - just over 1 in 7. Scaled up to GB population this equals 7,654,358 people.
Great Britain population figure is based on ONS Census data from 2021. The total adult population for GB was calculated as 51.7 million based on this dataset extracted on 1 July 2024 . This was then used as a basis to extrapolate the Yonder polling.
Calculation for unclaimed social tariffs based on: £1.68 billion going unclaimed in the broadband market according to estimates from Policy in Practice (April 2024). Nearly £300 million of total support scheme funding went unclaimed in 2022/23, according to data provided to Citizens Advice by the Consumer Council for Water.
IPPR modelling used the IPPR Tax-Benefit Model with the Living Cost of Food Survey 2021/22 microdata to uprate household incomes to 2024/25, with costs uprated to 2024/25 using disaggregated inflation data from the Office for National Statistics.
Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
Our network of charities offers impartial advice online, over the phone, and in person, for free.
Citizens Advice helped 2.66 million people face to face, over the phone, by email and webchat in 2022-23. And we had 60.6 million visits to our website. For full service statistics see our monthly publication Advice trends.
Citizens Advice service staff are supported by more than 16,000 trained volunteers, working at over 1,600 service outlets across England and Wales.
You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.