UK

Ofgem price hike intensifies pain for pensioners and poor, say campaigners

 

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NOVEMBER 23, 2024

The energy regulator Ofgem has announced a rise in the energy price cap in January for a second consecutive time, raising bills by 1.2% and bringing the average household energy bill to £1,738.

The announcement comes at the end of a week in which the Government’s own figures suggest that 100,000 pensioners in England and Wales could be pushed into poverty by its decision to cut winter fuel payments.

Caroline Abrahams, charity director at Age UK, called the cap rise “the latest in a series of blows for pensioners living on a low or modest income.”

Greg Jackson, CEO of Octopus, opined that pensioners could always stay warmer “by snuggling up on an electric blanket for a while.” But charity leaders have already warned that people will be “going to bed in hats and coats” this winter.

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented: “The decision to introduce a price cap change in the middle of winter was taken by Ofgem in 2022 and was described as an inhumane policy at the time. No wonder it has been opposed by campaigners ever since as households will have to find more money to keep themselves warm at the worst possible time. Already the average household will have paid around £2,500 extra for their energy than had we not been so exposed to volatile energy markets.

“To make matters worse, the new Government has cut back the levels of support available to some of the most at risk households. It is so vital the ministers bring in more support for vulnerable households this winter and speed up plans to bring in a social tariff for next winter – a move that is backed by the vast majority of voters.”

Warm This Winter spokesperson Caroline Simpson said: “It’s freezing this week and now we have another price cap rise which is devastating to the 6.5 million in fuel poverty and all of us who will be paying 66% more on energy than we did before the start of the  energy crisis.

“We desperately need to get on with the job of  ramping up our supply of homegrown, renewable energy, which is abundantly available to us on this windy island and a properly funded programme of insulation and ventilation to upgrade our leaky homes.

“Homegrown renewables are the only way we will cut our bills for good but whilst that kicks in we also need commitment from the government that vulnerable households will be supported with their energy bills this winter and next with a social tariff funded by the energy sector’s vast profits. In this day and age, nobody should be afraid to turn on the heating because they can’t afford to pay for it.”

New figures from the Warm This Winter campaign have found that almost half of those polled are worried about how they will stay warm this winter, with 46% worried that they may need to rely on the NHS this winter. Over 65s are the most concerned group with half worried about how they will stay warm.

Campaigners warn that the official statistics are likely to underestimate the suffering caused by the decision to means-test winter fuel payments. Those missing out on Winter Fuel Payments this year include 1.2m pensioners in absolute poverty and 1.6m disabled older people.

As part of the long term solution to cold damp homes, the Warm This Winter data shows that nearly three quarters of the public want the UK’s worst homes to be prioritised with a properly funded insulation and ventilation scheme.

But until the Government’s Warm Homes Plan is introduced, energy bills remain around 65% higher ( about £700 per average household) than in winter 2020/21 – a fourth winter of the energy bills crisis driven by our over-reliance on expensive gas.

As the first cold snap of the 2024/25 winter hits home, data analysis by academics has found fuel poor households are using dangerously low amounts of energy during freezing weather. Some of the UK’s poorest households use 21% less energy during cold weather than other households, leaving them exposed to potentially dangerous cold damp homes.

This has also led to calls to reform the Cold Weather Payments so they are paid out when the Met Office predicts the temperature in the next 24 hours is likely to fall to -4C or below, rather than paid after a cold snap as is the case at present.

As well as short term measures to tackle high energy bills, six out of ten people actively support a fully-funded nationwide insulation and ventilation programme to create healthy, energy efficient homes that will also make bill payers less exposed to energy shocks. Experts have calculated it could save households up to £400 on yearly energy bills.

Jan Shortt, National Pensioners Convention (NPC) General Secretary said: “Given that we already have freezing weather across the country, it is inevitable that those without the support of the Winter Fuel Payment will be suffering in cold homes – many afraid to turn the heating on at all. 

“The NPC is concerned to learn that the wait for those applying for pension credit is extended to 10 weeks as the extra staff being brought into the DWP will not be trained until the new year.  This delay will take those applicants who need their winter fuel payment now to at least February. We genuinely fear that some may not survive to see February and their delayed payment.”

Commenting on Ofgem’s price cap announcement, Friends of the Earth campaigner, Sana Yusuf, said: “Yet another increase in energy prices shows just how vulnerable we remain to the volatility of global gas pricing. We need a decent plan for upgrading our heat-leaking homes, which are largely the reason energy bills remain high and why too many people are freezing in cold, damp conditions again as we move into the colder months.

“The rise in inflation this week, driven primarily by climbing energy prices, shows why upgrading our homes goes beyond lifting people out hardship and protecting the planet – it makes economic sense too, as it will leave people with more of their hard-earned cash to spend. That’s why in its forthcoming Warm Homes Plan, the government must go much further and faster, by committing to spend £6bn a year on a national insulation programme, targeted in the areas most in need first. It’s only with this level of investment that we can end the scourge of cold homes for good.”

A large-scale insulation drive to bring the homes of 31 million people up to standard would cut household bills by 20% or around £150 in 2024. For the worst homes this saving rises to just less than £400. It would also reduce  pressure on the NHS as cold homes cost the NHS around £500m per year, and bring  down new cases of childhood asthma by 650,000, according to Citizens Advice. 

Meanwhile, in the short term, three-quarters of people want a social tariff for older and disabled people and two-thirds also feel that it should be part -funded by the wider energy industry who have raked in over £457 billion in profits since the start of the crisis. 

Image: https://www.flickr.com/photos/cj_collective/6992454230 climatejusticecollective Licence: Attribution 2.0 Generic Deed CC BY 2.0