State pensioners in the UK are bracing for a challenging winter as a combination of factors threatens to reduce their income by £459. This financial strain is particularly concerning for elderly individuals who rely heavily on state support to cover essential living costs. The tightening of eligibility criteria for the Winter Fuel Payment and Winter Fuel Allowance, which help with heating costs during winter, means fewer people will qualify for these crucial payments.
In addition to the loss of these important payments, pensioners are also facing higher energy bills. Ofgem, the UK’s energy regulator, has announced that from October 1st, average household energy bills will increase. This comes after two price cuts earlier in the year, but now, as energy markets change, costs are rising again.
Loss of Winter Fuel Payment and Allowance
Pensioners will lose out on the Winter Fuel Payment and Winter Fuel Allowance. These payments, previously offered by the Department for Work and Pensions (DWP), were meant to provide a safety net for pensioners during the colder months. The payment typically provided £300 to eligible pensioners to help offset the rising costs of heating and energy.
However, recent policy changes have seen many pensioners excluded from receiving this essential payment. Under the new rules, only those born before September 23, 1958, will qualify for the payment. Additionally, claimants must be receiving specific benefits such as Pension Credit, Income Support, Income-related ESA, Income-based JSA, CTC, Working Tax Credit, or Universal Credit.
Energy Bills Rise Due to Ofgem Price Cap
In addition to the loss of the Winter Fuel Payment, energy bills are also on the rise. Ofgem, the UK’s energy regulator, recently announced an increase in the energy price cap. This means that starting on October 1, 2023, the average home energy bill will rise by £149, increasing from £1,568 to £1,717 annually. This is up from £1,568 in the previous quarter.
The price cap is reviewed every three months, and while energy prices had decreased earlier this year in both April and July, they are now climbing again due to a variety of factors, including fluctuating wholesale energy prices. These increases affect the cost that energy providers pay for gas and electricity before they supply it to households, passing the extra costs on to consumers.
Pensioners, especially those on standard variable tariffs who pay by direct debit, are particularly impacted. The new rates will see them paying an average of:
- Electricity costs 24.5p per kilowatt hour (kWh) on average.
- A daily standing charge for electricity rises to 60.99p.
- Gas prices reached 6.24p per kWh.
- A daily standing charge for gas increased to 31.66p.
Sharon Graham’s Criticism of Political Decision
Sharon Graham, the general secretary of Unite, has been vocal in her criticism of the decision to scrap the Winter Fuel Payment. She specifically targeted Keir Starmer, leader of the Labour Party, accusing him of failing to protect vulnerable citizens while “leaving the super-rich untouched.”
At the Labour Party Conference, Graham’s remarks drew strong applause as she called on the Labour leadership to invest more in public services and British industry. She argued that austerity policies should be left behind and that the country, as the sixth-largest economy in the world, has the resources to better support its citizens.
Graham stated: “We are the sixth richest economy in the world; we have the money. Britain needs investment, not austerity mark II. We won’t get any gold badge for shaving peanuts off our debt. It’s the wrong decision, and it needs to be reversed.”
What’s Next for Pensioners?
The rise in energy bills and the loss of financial support through the Winter Fuel Payment will leave many pensioners worse off. For some, this could mean having to make difficult choices between heating their homes and affording other essential living costs.
