Pensioners face serious cuts in living standards as energy price cap skyrockets | Personal Finance | Finance
Retired Britons will have to grapple with spiralling costs as energy bills continue to rise. Today, Ofgem announced the price cap would be hiked to £3,549 a year from October, sending bills skyrocketing for many.
However, this is likely to be a particular worry for those who are on a limited income – such as pensioners.
Many will be worried as to where they will find the extra money to cover their rising bills, and what actions they will need to take to try to save, as a result.
Dennis Reed, Director of Silver Voices, said: “This is the opposite of a cap, it is a price explosion.
“The Government is letting energy prices rip with little regard for the savage cuts in living standards which will result.
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“It’s a truly frightening prospect and one that most could not have prepared for, and never expected to face at this point in their lives.
“I think a lot of older people will be utterly bewildered that it has come to this and will also feel badly let down, and I can’t say I blame them.”
As a matter of urgency, Age UK has called upon the Government to provide a new package of financial support for vulnerable customers.
It also wants to see help for older people at greatest risk of missing out on energy support – especially older households with a pre-payment meter, people without internet access or those who are ‘off grid’.
READ MORE: Pensioner says she’ll eat soup and a roll as price cap hits
Ms Abrahams added: “We are fast approaching a national emergency which will leave a significant proportion of the population unable to afford even a basic standard of living.
“Every day older people are telling us how scared they are; they need urgent reassurance from the Government that they will not abandon them.
“The new Government must act quickly to give older people hope and confidence.
“In the meantime, it would be extremely helpful if both candidates made it clear that they will stand by those with most to fear from soaring inflation, among them many pensioners, over the difficult months to come.”
However, problems have also been highlighted not only for those who are retired, but those close to leaving the workforce or planning for their futures.
Renny Biggins, head of retirement at The Investing and Saving Alliance (TISA), warned the energy price cap rise will have an impact on pension savers.
He said: “Our exclusive research shows over half of savers are dipping into their savings to supplement their disposable income, with 60 percent saying this is a direct result of the rising cost of living.
“There are already indications that people are reducing their pension contributions or opting out entirely. Perhaps most concerning is that over one-fifth have less than £1,000 saved.
“In times like these, reducing or opting out of pension contributions is unsurprising and it is easy and understandable to forget about the long term.”
Chancellor of the Exchequer, Nadhim Zahawi, acknowledged “stress and anxiety” which the latest price cap news is likely to cause.
However, he said help was on the way in the form of support announced earlier this year – such as Government’s energy bill rebates, and payments for those considered most vulnerable – including £300 for all pensioners.
What do you think? Join the debate in the comments section here.
