Today's announcement by Ofgem that the energy price cap will increase by 10% from October 2024 is alarming news for millions of households, particularly pensioners. This increase will see the average annual energy bill rise to £1,717, further compounding the financial strain on those already struggling with the cost of living. The price hike comes on top of changes to the Winter Fuel Payment, which will now be means-tested, leaving millions of pensioners without the support they have relied on to stay warm during the colder months.
In addition to the rise in the overall energy cap, standing charges and unit rates for both electricity and gas are set to increase. The electricity standing charge will rise by 1.4% to 60.99p per day, while the gas standing charge will increase by 0.8% to 31.66p per day. More significantly, the unit rate for electricity will jump by 9.6%, and for gas by 14%. These increases mean that households with higher energy consumption, particularly those using gas, will see their bills rise by more than the headline 10% increase.
Martin Lewis, a prominent consumer advocate, has highlighted that these increases will nearly double what households paid before the energy crisis. This is particularly concerning for pensioners, who will be among the hardest hit. Last year, pensioner households received up to £300 in extra cost-of-living support, but this year that assistance has been significantly reduced. Only those who qualify for Pension Credit will continue to receive the Winter Fuel Payment, leaving many just above the threshold struggling to cover their energy bills.
Matt Dronfield, Managing Director of Debt Free Advice, stated:
“This increase in energy prices, coupled with the loss of the Winter Fuel Payment for so many, is deeply concerning. Pensioners are already among the most vulnerable in our society, and these changes could push many into financial crisis. It’s essential that all pensioners check their eligibility for Pension Credit, as it could unlock vital support, including the Winter Fuel Payment.”
“We are calling on the government to reconsider the scope of Winter Fuel Payments. Narrowing eligibility too much risks leaving a large group of pensioners exposed to severe financial hardship. It’s not just about keeping the lights on; it’s about ensuring that no one has to choose between heating and eating this winter.”
Last year, Debt Free Advice supported 11,399 individuals in navigating financial challenges, with 21% of those clients dealing specifically with utility bill debt. The total outstanding balance for utility-related debts (electricity, gas, water, etc.) increased by 2% from FY22-23 to FY23-24, amounting to £5,707,143.90. This included a 12% increase in electricity debt and a 14% increase in gas debt. These figures highlight the escalating financial pressures on households and the crucial role of our services in providing relief. As a result of our advice and interventions, clients were financially better off by just over £17 million.
In response to the increasing financial pressures, Debt Free Advice has introduced a quick eligibility calculator on our website. This tool allows individuals to check in under three minutes which benefits and financial support they might be entitled to, such as Pension Credit and the Winter Fuel Payment. The calculator asks simple questions about income, age, housing status, and more, providing personalized suggestions on potential benefits. This tool is designed to help users quickly identify financial assistance they might not be aware of, ensuring they receive the support they need.
Debt Free Advice provides free, confidential assistance seven days a week from 8am to 8pm. You can visit our website at www.debtfreeadvice.com to learn more, use our quick eligibility calculator, or even start a video chat if you prefer. Additionally, you can reach us by phone at 0800 808 5700, and our team is available to assist via WhatsApp through the same number. We’re here to help you find the support you need.
Debt Free Advice urges pensioners and all those affected by these changes to take action now. Check your eligibility for benefits like Pension Credit, which can provide crucial financial assistance and unlock additional support. Additionally, exploring fixed-rate energy deals or discounted tracker tariffs may help mitigate the impact of the price increases.
For those struggling with energy bills or worried about the coming winter, Debt Free Advice offers free, confidential assistance to help manage and reduce debt.
For more information or to access free advice, please visit www.debtfreeadvice.com or contact 0800 808 5700.
About Debt Free Advice:
Debt Free Advice is a coalition of charities led by Toynbee Hall, an anti-poverty charity founded in 1884. We are funded by the Money and Pensions Service to provide free and impartial advice, all of which is regulated by the FCA. Since our founding in 2006, we have helped over 350,000 people with free, impartial advice on debt and money worries. We provide free, impartial, and confidential advice to over 20,000 people each year. Our mission is to support those