Tight budget for pensioners in fuel poverty

13 March 2008 / by Rebecca Sargent
Millions of pensioners remain in fuel poverty, despite the Chancellor Alistair Darlings’ attempts at boosting their income with this years Budget.

Yesterday’s budget saw the Chancellor bring an end to the 'five year freeze' on the Winter Fuel Allowance for pensioners. The allowance will now increase from £200 to £250 for over 60s and from £300 to £400 for over 80s.

But, according to uSwitch.com, fuel bills have risen by £446 since 2004, which is not reflected in the increase of the Winter Fuel Allowance.

The Chancellor stated that the increase will result in 9 million pensioners feeling better off, however, the increases have been criticised by the charity, Age Concern.

"An increase to the Winter Fuel Payment this year is a spoonful of sugar to make the bad medicine Budget go down for pensioners," said Director General of Age Concern, Gordon Lishman.

"Although this announcement is welcome, many older people will feel it is nowhere near enough to address the cocktail of price hikes they have had to swallow this year,"

New estimates from Age Concern put the number of pensioner households living in fuel poverty at 2.25 million.

The rise in the Winter Fuel Allowance comes just days after Age Concern urged the Chancellor to increase the allowance by at least £100, in addition to applying pressure to energy companies over social tariffs.

The Chancellor mentioned a rise in social tariffs and fairer deals for those on prepayment metres in his speech, stating: "We want to see the 5 million customers on prepayment meters given a fairer deal and energy companies to increase their support to vulnerable customers.

"Energy companies currently spend around £50 million a year on social tariffs. I want to see this rising to at least £150 million a year over the period ahead."

However, the Chancellor has come under fire for being too vague about how he intends to guarantee such changes happen.

The Chancellor continued: "We will work with the companies to take further action on a voluntary and statutory basis - to underpin this as necessary we will legislate."

But Age Concern believes the Chancellor’s statements to be insufficient, "vague promises on extra help on pre-payment meter charges and social tariffs simply aren’t enough for the government to meet its target on fuel poverty," said Mr. Lishman.

"A radical new package of measures should be introduced to target all of those in fuel poverty."

In addition to the increased Winter Payment Allowance, the Chancellor announced a one off payment of £50 to more than 60 households and £100 to more than 80 households.

Liberal Democrat Shadow Environment and Energy Secretary, Steve Webb, commented: "These modest measures barely scratch the surface."

Uswitch claims that for the Chancellor’s proposals to be a success, any effort will need to be aggressive, sustained and easy for consumers to understand.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "If the Government is truly committed to eradicating fuel poverty in this country then it needs to work with the industry and regulator to fully understand what the issues are and to determine how best to tackle them.



"Again, the Government must work with energy providers to realise the full potential of social tariffs. There must be an industry standard on social tariffs, clear criteria over which consumers should qualify, with help from the Government in identifying them, and a guarantee from suppliers that people on social tariffs will always be paying the lowest available price," she said.

"This would remove the guess work and provide vulnerable households with a real way out of fuel poverty," Ms Robinson concluded.

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