Big Six energy prices rise eight times more than wages

Households have suffered energy price rises eight times higher than the average increase in earnings over the past three years, according to Citizens Advice (Getty Images)

Households have suffered energy price rises eight times higher than the average increase in earnings over the past three years, according to Citizens Advice.

Te organisation found the Big Six energy suppliers had raised prices by 36 per cent since October 2010, while average earnings rose 4.4 per cent.

Chief executive Gillian Guy is calling for Government levies on bills to be scrapped as the organisation warns that families will reach crisis point this winter as they struggle to heat their homes and eat.

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.

Citizens Advice chief executive Gillian Guy said: "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."

She urged the Government not to cut support for poorer households and pensioners.

Energy suppliers claim that levies to fund energy efficiency measures for such households are a large part of the reason for them increasing prices for customers.

A change in the policy is widely expected to be announced in Chancellor George Osborne's autumn statement next month.

Ms Guy said: "Levies are adding an unfair financial burden to poorer households. Paying for these costs through taxation would be a much fairer approach and would avoid low income households funding the very support that is supposed to help them."

Citizens Advice, which operates from more than 3,000 locations across England and Wales, says its bureaux are seeing many people on the brink of financial despair, with parents often forced to choose between heating, clothing or feeding their families.

Calls to its consumer service about energy issues have surged since the first price increase was announced in October.

The organisation says it fears that some people are racking up debts just to pay their winter energy bills.

PA