LIZ Truss’s plans to freeze domestic energy bills this winter and cut taxes will benefit richer households far more than poorer ones, a leading think tank has warned.

The Resolution Foundation also said “winter will still be tough for many” despite the energy policy, which the new Prime Minister announced last week.

The think tank, which focuses on improving living standards, said the freeze, added to cuts to national insurance, ould give the richest tenth of houses £4,700 in support.

The lowest income 10 per cent would get typical support of £2,200.

The energy price guarantee (EPG) will limit average domestic bills in England, Scotland and Wales to £2,500 for two years from October - around £500 higher than they are now, but £1,000 lower than they would have been from next month under Ofgem’s price cap.

Despite Ms Truss opposing “handouts” during the Tory leadership race, the report concluded the Prime Minister’s move was “all-but-inevitable” given the huge increases in energy prices.

The Foundation estimated the cost of the EPG, funded principally by borrowing, “could eclipse the £137 billion worth of bailouts for banks during the financial crisis”, with the Government “now bearing all the financial risk related to future movements in gas prices”.

It said there was a “strong case” for extending windfall taxes on oil and gas producers - which Labour want, but Ms Truss opposes - and a “solidarity tax” on the rich.

A one per cent rise in income tax would raise £9.5billion, with 60% paid by the top fifth of households “who may benefit by over £13bn a year from the EPG”, it said.

The Foundation said the lack of targeting across both the EPG and previous interventions means support was not necessarily going where it is most needed.

As higher-income households typically use more energy, the richest fifth may gain an average of £1,300 this winter compared with £1,100 for the poorest 20%.

Around 11% of households with the highest electricity and gas use will gain more than £2,000 from the EPG while 13% gain less than £500.

The average level of support this year will be around £2,000 per home because of the EPG, a £400 discount on bills and a £150 council tax rebate for Band A to D homes.

Although energy changes are “broadly equal” around the country, the report said Ms Truss’s plans to scrap the national insurance rise would “skew support towards the very highest-income households”.

The EPG plus the NI cut could leave the 10% with the highest incomes benefitting by £4,700, more than double the £2,200 going to the poorest tenth in 2023/24.

Foundation chief executive Torsten Bell said: “Next year, twice as much support goes to the richest households as the poorest households, whereas this year everybody gets a lot."