Energy bills to make up ‘over a THIRD’ of state pension after ‘bleak’ price cap rise
Campaigner appeals for state pension release for dying people
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Earlier today (August 26), energy regulator Ofgem confirmed that the price cap will rise to £3,549 per year for the average household. This comes amid the continuing cost of living crisis which is placing unprecedented financial pressure on households due to the hike in inflation and energy bills. Claimants of the state pension are being warned that their costs will be “over a third” of their annual payments in light of an increase to the energy price cap.
How much will the energy price cap cost you?
This latest rise to energy bills represents a staggering 178 percent jump from last October’s average £1,277 yearly bill.
At the time, households experienced a £139 increase in their average annual energy bill due to the price cap.
However, this latest announcement by Ofgem will see energy costs rise by more than 11 times higher at £1,578.
State pensioners are already struggling to cope with the cost of living crisis and financial analysts are sounding the alarm over the “bleak winter” which awaits them.
READ MORE: State pension set to rise next year but 520,000 people will miss out
How much is the state pension?
As it stands, the full new state pension comes to £185.15 per week, while the basic state pension comes to a weekly rate of £141.85 per week.
Older households in receipt of the state pension and on low income are able to claim Pension Credit to boost their incomes amid the energy bill crisis.
On top of this, those in receipt of means-tested benefits such as Pension Credit are eligible for the £650 cost of living payment.
Despite this, experts believe the current support on offer is not enough as the price cap is expected to soar even further in the coming months.
Laura Suter, AJ Bell’s head of personal finance, outlined the “bleak winter” which many state pensioners are set to face in the coming months.
Ms Suter explained: “There’s no doubt that for many households a bleak winter is ahead – particularly with another price hike on the horizon in January after the regulator pushed ahead with its controversial reformed price cap.
“Many households can’t afford energy bills at their current level, let alone bills that are thousands of pounds a year more.
“With average annual energy bills at £3,549 that means energy costs are well over a third of the annual state pension of £9,628.”
READ MORE: Britons in higher bracket can do 2 main things to reduce tax payments
Currently, older households are entitled to a £150 council tax rebate, the £400 energy bill grant, £300 in Winter Fuel Allowance, and the £650 cost of living payment the get Pension Credit.
This comes to a generous £1,500, however Mr Suter noted that this will still not be enough for some of the country’s most vulnerable pensioners.
She added: “Even pensioners getting the full Government support available to them of £1,500, are still facing paying more than £2,000 for their energy bills, which many simply won’t be able to afford.
“It’s the same story for disabled households, who will be entitled to maximum support of £1,350, but will typically have far higher than average energy bills due to energy-intensive specialist equipment and being at home more.
“Frustratingly for those struggling with energy costs there are no easy hacks or tricks to significantly cut their bills – advice to turn off chargers, or devices not in use, will save pennies and is insulting to families facing such staggering price increases.
“What’s more, with standing charges having risen slightly, it now costs £5.18 per week before you’ve even used a unit of energy.
“The only option is to cut energy usage as much as possible and hope for further Government support for those struggling the most.”
The majority of households in the UK are expected to see their energy bills rise from October 1, 2022.
Source: Read Full Article