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Home Finance Pensioners braced for more misery as energy price cap set to soar

Pensioners braced for more misery as energy price cap set to soar

by uma

 

  • Yesterday Ofgem chief executive said he expected the energy price cap to hit £2,800 in October.
  • This is after the cap was already hiked to £1,971 in April.
  • According to the latest Pensioner Income Series data the average single pensioner has £246 per week in income after housing costs. A hike to £2,800 in the price cap means their energy bills could account for almost 22% of that income.
  • Pensioner couples have an average income of £511 per week. Energy bills could account for around 10% of their income.

The latest Pensioner Income series data (published in March) can be found here Pensioners’ Incomes Series: financial year 2020 to 2021 – GOV.UK (www.gov.uk)

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“Yesterday’s comments heaped further misery on people already stretched to the limit by rising bills. The prospect of a further huge increase just as we head into the colder winter months is the last thing people need as their incomes have not grown in line with these soaring prices.

Pensioners are particularly vulnerable in the current times. The latest pensioner income data shows the average income for a single pensioner after housing costs is £246 per week – around £12,800 per year. An energy price cap of £2,800 would account for a whopping 22% of this. Pensioner couples do better with an average income of just over £500 per week but the fact remains energy bills are still going to take a huge chunk out of their incomes as we go through the coming months.

The suspension of the triple lock this year has been particularly painful for many pensioners. The 3.1% increase in state pension awarded in line with last September’s inflation figure has been dwarfed by inflation currently running at 9% and heading higher. If inflation remains high throughout the year, then pensioners will be in line for a much larger increase next year but that feels like a very long way away right now.

Pressure is growing on government to step up before the Budget with a further package of measures to offer some kind of relief. This could be funded by the much-discussed windfall tax on the profits of energy generators. With no sign of energy prices decreasing any time soon consumers face an anxious wait to see what help they can receive to help their budgets stretch further in these difficult times.”

 

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