Age UK criticises government over energy price cap rise and winter fuel payment means-testing

Age UK has voiced strong criticism following Ofgem’s announcement last week that the energy price cap will increase by 10% in October, reaching £1,717.

Households across the UK are bracing for a sharp rise in energy costs this autumn, as the energy regulator Ofgem has announced a 10% increase in the energy price cap starting from 1 October 2024.

The increase will see the average annual energy bill for a dual-fuel household paying by direct debit rise to £1,717, adding approximately £12 per month to the typical bill.

This increase comes as part of Ofgem’s quarterly adjustment of the energy price cap, which limits the maximum amount energy suppliers can charge customers per unit of energy and through standing charges.

Although the new cap represents a significant increase over the previous quarter, it is still 6% lower than the same period last year, when the average bill was £1,834.

Ofgem has stated that the primary driver behind this latest hike is ongoing volatility in the global energy market, exacerbated by geopolitical tensions and extreme weather events that have intensified competition for gas supplies.

Age UK warns that this rise, combined with the government’s decision to means-test the Winter Fuel Payment (WFP), could have severe consequences for millions of pensioners across the country.

Caroline Abrahams, Charity Director at Age UK, described the situation as “disastrous” for older people, particularly those living on low and modest incomes or those in vulnerable circumstances due to ill health. “Means-testing Winter Fuel Payment when fuel prices are rising by 10% spells disaster for pensioners on low and modest incomes or living in vulnerable circumstances due to ill health,” she said. Abrahams highlighted that around 2 million older people will face greater difficulties in managing their energy bills and maintaining their well-being as winter approaches.

The announcement comes at a time when many pensioners are also losing the cost-of-living payments they received over the past two years. “With pensioners also losing the cost-of-living payments they’ve received over the last two years, we simply cannot see how some of them will cope,” Abrahams added.

The charity has been particularly critical of the decision to introduce means-testing for the WFP with little notice and without safeguards to protect vulnerable groups. “This latest bad news about the Energy Price Cap rising quite significantly makes it even more obvious that means testing WFP with virtually no notice & with no protections to safeguard vulnerable groups was the wrong policy choice and one that is potentially hazardous for some older people,” Abrahams stated.

Long-term Challenges and Calls for Action

Age UK also highlighted the long-standing issue of under-claiming Pension Credit, a benefit that could provide much-needed financial support to many older people. For over a decade, about a third of pensioners who are entitled to Pension Credit have not claimed it, leaving them without vital financial aid. “There’s scarcely any time to tackle the long-term under-claiming of Pension Credit – for more than a decade a third of pensioners who are entitled to it have consistently missed out,” Abrahams pointed out.

She also noted the plight of “the million or so older people whose small incomes take them just above the line to claim [Pension Credit] are horribly exposed – no take-up campaign can help them.”

With winter approaching, Age UK is calling on the government to reconsider its decision. “Means-testing WFP in these circumstances this winter is reckless and wrong. The Government must think again,” Abrahams urged.

Support and Advice for Older People

Age UK is encouraging older people who are struggling with their bills or living on a low income to seek assistance. The charity’s free Advice Line, available at 0800 169 65 65, offers guidance on accessing all available financial support. Alternatively, information can be found on their website, www.ageuk.org.uk/money, or through local Age UK branches.

In addition to providing advice, Age UK is campaigning to reverse the decision on the Winter Fuel Payment. The charity is urging the public to support their efforts by signing a petition against the cuts. “Cutting the Winter Fuel Payment is the wrong policy decision and will leave millions of older people struggling this winter,” the charity stated in a call to action.

For those wishing to support Age UK’s efforts, the petition can be signed online at campaigns.ageuk.org.uk.