Older people 'forced to cut down energy usage'

Older people are being forced to cut down on their energy usage as they face soaring fuel bills, a report warned today.

Pensioners have seen their gas bills jump by 55 per cent in the two years to April 2007, while electricity bills have risen by 36 per cent, according to the Institute for Fiscal Studies.

As a result, the amount of money older households spend on fuel has increased by about 22 per cent during the same period, despite them cutting down their consumption by 10 per cent.

Age Concern and Help the Aged, which commissioned the report, warned that further price rises seen during 2008 would have increased the pressure on older people, forcing many of them to turn down the heating or cut spending in other areas in order to afford their energy bills.

The group said some pensioners were even resorting to staying in bed in a bid to reduce the amount they spent on heating.

The research also uncovered very different lifestyles being led by the poorest and richest pensioners.

In 2007, the poorest fifth of pensioners spent nearly 40 per cent of their budget after housing costs on food and fuel, while the richest fifth spent just under 20 per cent of their income on these things.

Instead the single biggest area of expenditure for the richest group of pensioners was holidays, at 12.5 per cent, while the poorest fifth spent only 3.3 per cent of their budget on trips away, nearly half the 6.5 per cent and 6.2 per cent of their income that was devoted electricity and meat respectively.

Pensioners have also seen an increasingly large proportion of their budget taken up by local taxes, such as council tax, with this soaring by 84 per cent between 1995 and 2007 to account for 7 per cent of total expenditure, compared with 4 per cent for non-retired households.

Older people are continuing to help out younger family members, with cash payments, presents to family and friends and charitable donations the 10th largest area of expenditure for the over 80s.

Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: "What's most clear from this important new research is the significant differences in living standards between older people at different ends of the income scale.

"Shockingly, the report finds that while poorer pensioners are spending more of their available income on energy, they are - at the same time - reducing the amount of energy they buy.

"Not only does this demonstrate the problem of soaring energy costs in recent times, but is a warning to policy makers and others that vulnerable older people could be putting their health at risk in winter just to cut costs."

Liberal Democrat work and pensions spokesman Steve Webb said: "Pensioners have been hit by soaring fuel bills which have taken a growing chunk out of their meagre state pensions.

"Once again, we see the woeful inadequacy of the basic state pension, one of the worst in Europe.

"Forcing pensioners to rely on complex and poorly understood means-tested benefits is simply not the answer to pensioner poverty. It is time that the state pension was raised to a decent level.

"As a first step, the Government should restore the earnings link at once."

Energy and Climate Change Minister David Kidney said: "Pensioners must not feel they can't heat their homes this winter.

"Cuts in the wholesale costs of energy must be passed on by energy suppliers to consumers, and that's particularly important for those on lower incomes.

"We're giving extra help to those households through a range of measures including Warm Front grants for insulation and heating improvements, winter fuel payments to all pensioners this winter, and we will create mandatory social price support for the poorest at the earliest opportunity."