Household Bills
Energy bills for elderly have doubled since 2005
Pensioners faced a staggering £17.4bn electricity and fuel bill last year as figures reveal fuel bills for the elderly have doubled since 2005.
According to insurers Saga, the average yearly spend on fuel bills for the over 65s in the past year was £1355.90 which has more than doubled from £668.98 in 2005.
Many providers increased prices towards the end of 2012, with further price increases due this month from E.On. The provider will increase its gas and electricity prices from 18 January.
Dr Ros Altmann, director-general of Saga, said: “Energy prices are continuing to increase and we are still to feel the full effects of the latest price rises so energy costs are likely to put even more of a financial strain on households in 2013.
“While incomes have increased in the last seven years, they have not kept pace with the rate that energy and fuel costs have risen, meaning that people are spending more of their income on fuel.
“This is especially true for older people who are often on lump or fixed incomes or whose savings income has fallen.”
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Saga’s analysis shows that the portion of income spent by over 50s on fuel has increased at a faster rate than for the rest of the population meaning that these price increases pose even more of a financial issue for this demographic.
Altmann added: “Inflation rates remain higher for the over-50s, reflecting in part the fact that utility prices are much higher.
“We know from our own research just how much of a burden energy prices are on the finances of those faced with fixed or dwindling incomes, especially older generations, of whom 29% are having to raid savings every month in order to make ends meet.”
Pensioners were, however, given some good news yesterday, as the UK’s statistics authority decided against changing the way the key measure of inflation, RPI, which is often linked to retirement incomes.
Any change in the way RPI is calculated would see investors holding the popular index-linked savings certificates from the National Savings and Investments (NS&I), or those with pensions that invest in government debt, have thousands shaved off of their incomes.
Some final salary pension payments are also linked to the index.