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Pensioners paying the price of rising energy bills

28 August 2009 / by Andy Davies

Pensioners are paying more money to cover the cost of rising energy bills, despite using less gas and electricity, research has found.

According to a new report published by the Institute of Fiscal Studies, between 2004 and 2007 the price of gas increased by 55 per cent while the cost of electricity rose by 36 per cent.

To cope with these rises pensioners increased their spending on energy by around 22 per cent and reduced their fuel consumption by 10 per cent.

The IFS believes that rising costs in 2008 will have only increased the pressure on pensioners.

Commenting on these findings, Cormac O'Dea, one of the authors of the report, said: ""In recent years, the rapid rise in household fuel prices has been of considerable cause for concern, in particular for older and vulnerable households.

"This research shows there have been substantial changes in fuel spending and consumption amongst older households, with spending rising more rapidly (and consumption falling by less) for both the poorest and richest than for those in the middle of the income distribution."

The report, which was commissioned by Age Concern, also found that in 2007, the poorest fifth of pensioners would spend 40 per cent of their budget on food and fuel cost, while the wealthiest fifth spent just under 20 per cent.

Andrew Harrop, head of public policy at Age Concern and Help the Aged, believes the report findings are shocking, commenting on pensioners spending more on energy bills whilst using less gas and electricity, he said:

"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."

Consumer Focus, believes energy companies could make immediate cuts of 10 per cent for gas and 3.5 per cent for electricity, which could save UK energy customers £2.2billion a year.

Jonathan Stern, energy expert for Consumer Focus, said: "It is shameful that vulnerable pensioners' energy bills have gone up, despite them having to turn down their heating to cut costs. Cutting back on heating to avoid high bills could put the health of many at risk this winter."

He added: "We need a radical energy efficiency scheme from the Government to protect the poorest pensioners, families and disabled people from fuel poverty. The energy companies must also do the right thing by their customers and pass on the significant wholesale energy price cuts immediately."

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