Pensioner Michael Bailey is one of many who will be hit hard by the increase in energy bills this April, saying he will have to cut back on the little he already uses.
“I’m really worried. I already struggle to heat my home properly, and now I’ll have to reduce the time I heat my home each day,” Mr Bailey, 71, said.
Ofgem’s new price cap will mean energy bills rising from £1,738 to £1,849 from 1 April for a typical dual-fuel household – a larger than expected increase of 6.4 per cent.
Mr Bailey already struggles to afford to pay his energy bills – even though he is still eligible for the winter fuel payment.
Speaking to The i Paper, he said: “I’m worried about other older people, especially those who are just over the limit for getting the winter fuel payment and will miss out this year.
“Because of having insufficient national insurance stamps, I qualified for pension credit, which means I am then also entitled to housing benefit to help pay my rent and council tax reduction, which reduces my bills a bit.”
He is currently paying £92 a month for gas and electricity, which he said, “feels like a lot”, especially because just six months ago he was paying £62 a month.
Often, Mr Bailey, who is from Essex, has no choice but to leave the heating off and put jumpers on instead to save money, despite his flat being very cold.
In July, Rachel Reeves announce that winter fuel payments, worth between £200 and £300, would only be made to people in receipt of pension credit or other means-tested benefits.
There are around 10.7m pensioners who will no longer receive the winter fuel payment as a result of the change – 90 per cent of the UK’s pensioner population.
According to Age UK, amongst these 10.7m pensioners are 1.6m pensioners living in poverty, 0.9m pensioners who live just above the poverty line, and 0.4m pensioners who live with income below that required for minimum living standards.
On top of his energy bill worries, Mr Bailey has struggled to find affordable housing.
He said: “I was living with a friend for a while, but then he told me he needed his room back, so I had to try to find a privately rented home.
“It was a nightmare, and it felt really difficult to find something affordable in my local area.
“Luckily, I was finally able to find somewhere. It’s a small one-bed rented property. I’m very lucky as pension credit helps me pay rent and I qualify for the additional benefit of housing benefit.
“I’m so grateful for this as I feel I’d be out on the streets without that help.”
Joanna Elson, chief executive of Independent Age, said Tuesday’s price cap announcement is “more bad news for the older people in poverty that have already been subjected to a brutally long and cold winter”.
She said: “People in later life on low fixed incomes have stretched their budgets to breaking point during the colder months, and many tell us they don’t have enough money to turn the heating on full stop. Now, their bills rise yet again to amounts they simply cannot afford.
“History cannot be allowed to repeat itself next winter. The Government needs to put in place plans that support older people in financial hardship to turn their heating on.”
Since the changes were made to the winter fuel payment in July, Independent Age’s helpline has seen a “massive increase” in calls regarding the payment, Ms Elson said.
Many people seeking help have made “drastic cutbacks”, such as only living in one room and cutting down on food, she added.
“Far too many older people on low incomes don’t receive pension credit and are now falling through the cracks – in the short term, the Government should urgently review and widen the financial threshold of the winter fuel payment.
“In the long-term, the Government and Westminster need to work together to ensure the financial security of all people in later life.
“We are calling on the Government to work with Ofgem to establish a social tariff for energy that is well promoted and makes bills affordable. This will go a long way in protecting customers on low incomes from future spikes in cost.”
The energy regulator blamed the volatile international gas market, which has in turn hiked wholesale costs, for the rise to the cap.
Jonathan Brearley, chief executive of Ofgem, said: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households.
“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.”
People struggling to pay their bills are encouraged to speak to their supplier to see if there is any help they can get. Switching to a fixed tariff may also lower bills for many households.
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