News Archives - Page 2 of 26 - End Fuel Poverty Coalition

Energy giants see £457 billion profits as consumers’ bills rise

Just 20 energy companies have made a staggering £457 billion in profits since the start of the energy bills crisis. [1]

As of the end of August, following 2024 interim results, profits have amounted to over £457 billion since just before the energy crisis started. £61 billion has been posted in profits this year alone.

The staggering sums are revealed in the End Fuel Poverty Coalition’s updated profit tracker which examines profits made by a sample of companies that include energy producers (such as Equinor and Shell) through to the firms that control our energy grid (such as National Grid, UK Power Networks and National Gas Transmission) as well as suppliers (such as British Gas). It does not include supply chains or market trading firms.

Ofgem’s most recent Price Cap announcement indicated that energy bills will rise 10% from 1 October.

As part of this rise, the regulator indicated that suppliers will be able to make an additional 11% in profits on every standard variable tariff. Analysis of these figures suggest that supplier profits allowed through the Price Cap could amount to c.£1.2 billion over the next 12 months, enough to cover the cost of Winter Fuel Payments for almost all pensioners. [2]

Warm This Winter spokesperson Caroline Simpson said:

“There are clearly an obscene level of profits being made and now energy suppliers have been given the green light to make a further £1.2 billion which is enough to cover the Winter Fuel Payment allowance for all pensioners.

“That’s why the government is right to take suppliers to task and ask them how they plan to help customers of all ages get through the winter ahead.

“We agree with the Government that we need to invest in homegrown renewable energy and an extensive programme of insulation to end this vicious cycle of bill shocks and reliance on volatile fossil fuels.”

A March 2024 Warm This Winter Tariff Watch report also called for improvements in transparency of the ownership of these firms after it found that British households had been boosting the profits of Chinese and Qatari Government-backed funds as the cost of the gas network has surged 38%.

A spokesperson for the End Fuel Poverty Coalition added:

“As we’ve said all along, there is plenty of money in the energy system, but it never ends up in the hands of consumers who are struggling to pay their energy bills.

“Millions are now in energy debt, pensioners have had their Winter Fuel Payments taken away and yet shareholders are seeing returns running to the billions of pounds every year.

“The Government must step in to end this unfairness, bring about an end to energy debt, an extension of Warm Home Discounts and restore Winter Fuel Payments to more pensioners.”

The Warm This Winter campaign is urging the public to join more than 4,500 people in writing to their MP or signing the 38 Degrees or Age UK petitions.

ENDS

[1] The updated tracker is available online at https://www.endfuelpoverty.org.uk/news/energy-firm-profits-tracker/

[2] Ofgem Price Cap decision, p4 https://www.ofgem.gov.uk/sites/default/files/2024-08/Summary_of_Changes_to_Energy_Price_Cap_1_October_to_31_December_2024.pdf. EBIT allowance from 1 October 2024 is £44 per standard variable tariff customer per year. Ofgem state that 27m customers are on a standard variable tariff. £44 * 27m = £1.19bn.

Winter Fuel Payment backlash enters fourth week

The campaign against the Chancellor’s decision to axe Winter Fuel Payments from millions of older people has continued into a fourth week.

In a speech to the media in Downing Street, the Prime Minister attempted to justify the impact of the decision after a report from Age UK found that nearly 2 million pensioners could face poverty this winter.

The Prime Minister hit out at “rot” in the system which had harmed the nation’s finances, that the Payments were “not a particularly well designed scheme” and that “support” will be there for the pensioners who need it the most. The PM hinted that those in society with the “broadest shoulders” could expect to see tax rises in the Budget.

However, analysis has found that some older people will face 131% year-on-year bill increases and the Pension Credit system has been hit with delays in processing applications.

Over 400,000 people have signed a Age UK petition with 300,000 signing a 38 Degrees petition and over 4,500 members of the public have shared their concerns with MPs via the Warm This Winter campaign.

A spokesperson for the End Fuel Poverty Coalition, commented:
“Axing Winter Fuel Payments is not about rot in the system, it is about basic fairness for older people facing soaring energy bills.

“In real terms, the changes this winter mean that some older people will face the highest energy bills on record.

“This has the potential to create a public health emergency which will actually create more pressure on the under-pressure NHS which the Prime Minister says he wants to fix.

“The impact of living in cold damp homes is particularly harsh on those older people with a disability, a long term health condition or with poor mental health. It results in people turning to an NHS and, in some cases, can result in additional winter deaths.

“Ending energy debt, extending the Household Support Fund, expanding Warm Home Discounts and evolving standing charges are all now needed urgently to help mitigate the impact of high bills and the axe to the Winter Fuel Payment.

“But as well as support this winter, the public need to see a clear timetable for when the very real benefits of cheaper renewable energy and the Warm Homes Plan will kick in.

“If the Prime Minister needs to find some ‘broad shoulders’ to pay for this support, let’s not forget that every month we hear about more massive profits for firms in the wider energy industry.”

Jonathan Bean from Fuel Poverty Action, added:

“Reeves’ reckless decision has robbed pensioners of their winter heating lifeline, just as prices rise again. Urgent action is needed by the Government and Ofgem on inflated energy prices, high standing charges and obscene profits.”

Energy bills up as some pensioners face worst prices on record

The average household energy bill is to increase by £149 from 1 October after Ofgem said it was hiking its price cap by 10% from the current £1,568 for a typical household in England, Scotland and Wales to £1,717.

Meanwhile, analysis by the End Fuel Poverty Coalition has found that in real terms, the changes this winter mean that some older people will face the highest energy bills on record.

A spokesperson for the End Fuel Poverty Coalition, commented:

“With energy bills for the winter ahead now confirmed as being 65% above where they were before the crisis, the Government needs to come up with a plan to prevent even more households entering fuel poverty this winter.

“Ending energy debt, extending the Household Support Fund, expanding Warm Home Discounts and evolving standing charges would all help mitigate the impact of high bills and the axe to the Winter Fuel Payment.

“But as well as support this winter, the public need to see a clear timetable for when the very real benefits of cheaper renewable energy and the Warm Homes Plan will kick in.

“To add insult to injury, in the detail of today’s Ofgem announcement is the fact that the profit margins energy suppliers are allowed to make will increase by 11% [pdf, page 4].

“Add to this that every month we hear about more massive profits for firms in the wider energy industry. It’s time to tax these firms fairly – not just the fossil fuel producers – and use the money to keep people warm now and in the long term.”

Warm This Winter spokesperson Fiona Waters said:

“This price hike is yet another blow to the millions in fuel poverty who, like every other bill payer in the UK, are still forking out 65 percent more than they did for their energy than at the start of the crisis.

“Meanwhile energy companies have been profiteering, making more than £470 billion since 2020. That shows there is money in the system but that is going to energy bosses and their shareholders, when it needs to go to ordinary people.

“Today just highlights the Government’s policies on renewables and energy efficiency are needed to mend this broken system but we also need help now to get everyone of all ages through the winter ahead.”

Richard Kramer, Chief Executive of the national disability charity Sense, said:

“This increase in the energy price cap will be very alarming for many disabled households, who face unavoidable extra energy use for essential equipment such as powered chairs and feeding machines. This is a stark reminder that the cost-of-living crisis is far from over, and disabled households still need extra support.

“We would like the government to implement a social energy tariff, which would help level the playing field for disabled people who rely on energy-intensive equipment. Disabled people cannot be left waiting any longer for targeted help with their energy bills.”

More reaction to follow

Government winter fuel payment plans hit by chaos

Hundreds of thousands of pensioners could miss out on getting Winter Fuel Payments before cold weather hits.

Almost 900,000 pensioners need to apply for the Pension Credit if they want the payments designed to keep them warm this winter, but the official helpline claims that they may not have their application processed in time.

A recorded message on the Pensions Credit helpline says applications could take nine weeks to process, but the “qualifying period” for the Winter Fuel Payment is 16 September, in just over 3 weeks. [1]

Ministers have admitted that pensioners can still apply for the Winter Fuel Payments after the qualifying period has closed, as long as they apply for Pensions Credit before 21 December and would have been eligible in the qualifying period (16-22 September).

Assuming a pensioner meets the Pensions Credit criteria, the DWP advise that any eligible claimants whose Winter Fuel Payment does not come through automatically will have to claim for that by 31 March 2025.

However, campaigners have highlighted that backdating payments means extra bureaucracy and that the money may not reach vulnerable pensioners until after the first cold spell of the winter has hit.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It’s clear Ministers have not thought this through.

“When the Chancellor cruelly snatched away the winter fuel payment from millions of pensioners, she promised to help households who are eligible to claim the benefit.

“But as it takes so long to process new claims, even those applying now may be forced into a back-dating procedure which could delay payments.

“While we support ministers’ drive for longer term reduction in energy bills through renewables and a Warm Homes Plan, households need help this winter.

“The Government must broaden the targeting of the Winter Fuel Payment, to introduce support to end energy debt, expand the Warm Home Discount and extend the Household Support Fund.”

In a poll by YouGov for the Energy and Climate Intelligence Unit (ECIU), two thirds of people (67%) were aware of the move to remove winter fuel allowance payments from pensioners, apart from those who receive means-tested benefits. The pollsters found that 59% opposed it, with only 28% in favour.

Jonathan Bean from Fuel Poverty Action, said:

“The Winter Fuel Payment axe has been wielded at short notice and with no consultation. And now the whole process is mired in confusion.

“Left caught up in the chaos are older people who will be left fearful of the winter ahead. Many will be unsure if they will get the Winter Fuel Payment or not and delays to payments will only add to the misery.

“If ministers think that a communications campaign to encourage take up of Pensions Credit is any substitute for actual help with energy bills this winter, then they are very much mistaken.

“The Government needs to face up to the fact that this policy is unpopular and dangerous and change track.”

Meanwhile, Citizens Advice research found that a quarter of the UK population believe they could be forced to turn off their heating and hot water this winter due to an expected rise in household energy bills from October. The figure rises to 39% of bill payers on a low income.

Jan Shortt, General Secretary of the National Pensioners’ Convention added:

“Choosing pensioners as an easy option to cut support from is set to condemn hundreds of thousands of older, and vulnerable people to a grim and potentially life threatening winter ahead.”

ENDS
[1] Call to 0800991234 made 12:25 21 August 2024

Ministers urged to review nine nightmare energy rules

Ministers should send a clear signal that they are on the side of consumers by reviewing nine sets of rules, according to campaigners.

As households count down to the next Ofgem price cap announcement on Friday (23 August), an analysis of recommendations from previous Warm This Winter Tariff Watch Reports [pdf] has identified ways regulators could cut bills.

While six recommendations from a series of Warm This Winter Tariff Watch Reports published during 2023 and 2024 have been implemented by Ofgem, a further nine proposals have not been acted on.

Chief among them are recommendations to bring down standing charges, cap exit fees and improve governance of the energy industry. [1]

The standing charge reforms could see a reduction in these annual charges on households by £152.06 (46% from £334.08 a year to £183.02).

Delivering these changes would require changes to Ofgem regulations and Government funding as well as action taken to protect low income and high usage households, such as those who rely on energy for medical needs.

This could include the introduction of a social tariff, which is backed by well over half the population according to recent polling by Opinium, and could be paid for through contributions from energy industry profits (producers, networks and suppliers).

Meanwhile, the loose regulation on exit fees has left bill payers at risk of being stuck on expensive fixed rate energy tariffs or with poor customer service as the cost of leaving a fixed tariff early would leave the household out of pocket.

Exit fees on energy bills have increased by 345% in the last three years. Around three million UK households have opted for fixed energy tariffs and the latest Warm This Winter Tariff Watch report shows that the majority have exit fees of more than £100. A snapshot taken in April 2024 found that 76% of fixed tariffs have annual costs above the Ofgem price cap.

Other rules which have been highlighted in Tariff Watch reports include a lack of transparency in energy firm ownership which has seen British households boost the profits of Chinese and Qatari Government-backed funds as the cost of the gas network has surged 38%.

Questions were also raised about the profits being made by energy firms due to an underinvestment in electricity infrastructure and 14 obscure charges to households’ electric bills.

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“These suggestions must be part of a road map to bring down energy bills, improve transparency in the industry and reset Britain’s broken energy system so it is on the side of consumers.

“While these changes to regulation won’t be enough to resolve all the problems we see, it would signal a welcome change in direction.

“We know the Government has the ambition to bring down bills in the long term, but it also needs to look at shorter term measures too.

“Ministers can earn the public’s trust by protecting vulnerable households, reducing energy debt, bringing in changes to energy meters, ramping up insulation programmes, reforming standing charges and ending energy industry profiteering.”

Fiona Waters, spokesperson for the Warm This Winter campaign which commissioned the reports, said:

“The new government has inherited a nightmare set of rules that are clear hurdles to creating the fairer energy system that the public are crying out for.

“With energy bills forecast to increase again in October, this problem is only going to get worse if new ministers do not step in now. Now is the time to bring back fairness with urgent action to support struggling households through the next winter and a commitment to end profiteering by properly taxing the wider energy industry.”

Dylan Johnson, from Future Energy Associates which compiled the reports, added:

“More can and should be done by the energy regulators.

“Overall, Ofgem must become more proactive in identifying problems with our energy system and more efficient in enacting the necessary changes to protect the most vulnerable in our society.

“For now, Ofgem must implement immediately actionable solutions and not shy away from making the key long-term decisions that can achieve a fairer, greener energy system.”

ENDS

Recommendations Addressed by Ofgem / Government (edition of Tariff Watch):

Convergence of PPM and Direct Debit Prices (TW1): Ofgem implemented a levelling charge, balancing the standing charges between PPM and Direct Debit customers.
Review of Wholesale Energy Allowances (TW1): Ofgem conducted a thorough review and concluded no systematic differences in costs.
Reduction on EBIT Allowance (TW1): Ofgem revised the EBIT allowance to include both fixed and variable components.
Market Stabilisation Charge (MSC) Removal (TW1): The MSC expired on March 31, 2024.
Consumer Standards Consultation (TW2): Ofgem announced reforms to improve customer service, effective December 2023.
New Prepayment Meter Rules (TW2): Ofgem set conditions for PPM installations, effective November 8, 2023, although these did not go far enough in addressing the concerns of all campaigners.

Recommendations Not Addressed by Ofgem / Government:

Transparency in Cost Calculations (TW3a, TW3b): Ofgem has not improved the transparency or provided detailed breakdowns and machine-readable data formats for DNO and gas network costs.
Clearer Explanations for Shifting DUoS and TNUoS Costs (TW3a): Ofgem has initiated a review but has not provided clear explanations or justified the cost shifts.
Addressing Chronic Underspending by DNOs (TW3a): It remains unclear what specific actions Ofgem is taking to ensure adequate investment by DNOs.
Dynamic Approach to Line Losses Calculation (TW3a): Ofgem has not implemented a dynamic framework for line losses.
Management of Gas Network Decommissioning Costs (TW3b): Ofgem has acknowledged the issue but has not detailed specific steps to manage decommissioning costs.
Ownership and Ethical Considerations (TW3b): Ofgem has not outlined specific actions to scrutinise and align gas network ownership with national security and ethical standards.
Cap on Exit Fees (TW4): Ofgem has not implemented measures to cap exit fees or improve their transparency.
Shift Costs from Standing Charges to Unit Rates (Standing Charge Report): Ofgem has closed their call for input on standing charges, but no further steps have been taken to move adjustment allowances, headroom allowances, profit allowances, payment uplift, and levelling costs entirely to the unit rate section of the bill.
Shift Policy Costs from Standing Charges to General Taxation (Standing Charge Report): While the Labour Party has indicated a willingness to broadly address standing charges in their manifesto, no concrete steps have been taken yet to move policy costs from standing charges to general taxation.

The full report is available to download. Previous Tariff Watch reports can be downloaded from the reports and correspondence section of the EFPC website.

Councils warn on Household Support Fund while Scottish fuel payments axed

More than four out of five councils in England expect demand for welfare support to increase over the winter, according to the Local Government Association.

However the Household Support Fund, which is the main route for councils to provide assistance, will close in September as central government funding will run out. This has left six in 10 local councils saying they will be unable to provide extra welfare support.

The Household Support Fund was introduced by the previous government in 2021 aimed at helping people struggling to buy food, pay bills and cover other essentials.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The Household Support Fund is one of the last lines of defence against poverty for hard-pressed families and vulnerable people.

“We have publicly commended the Government in taking some of the long term measures to tackle high energy bills, such as the drive for more renewable energy and a Warm Homes Plan. But these solutions will take time to bring down bills.

“In the meantime, households of all ages will need more support from the Government to stay warm this winter, not less.

“As well as extending the Household Support Fund, we urge the Chancellor to rapidly consult with consumer groups to reverse planned changes to Winter Fuel Payments, to introduce support to end energy debt and expand the Warm Homes Discount.”

The Scottish Government has also now outlined how the UK Chancellor’s cuts to winter fuel payments will affect pensioners in Scotland.

Plans to means-test Winter Fuel Payment in England and Wales will see the Scottish Government’s funding for the scheme cut by up to £160 million.

The Winter Fuel Payment UK benefit was due to be replaced by a Scottish alternative – but ministers have confirmed it will be means tested, while the roll out has been delayed.

Age Scotland said the government in Edinburgh has been left with no decision but to replicate plans to means-test the Winter Fuel Payment.

Frazer Scott, chief executive of Energy Action Scotland, commented:

“The UK Government has left little choice for the Scottish Government but to remove this vital support from hundreds of thousands of older households.

“It is a real body blow for pension age households struggling to pay for unaffordable energy.

“Confirmation of the loss of this income for budget conscious older households will undoubtedly put additional pressure on health and advice services putting health at risk. This is not a fairer system, it widens inequalities.

“Deeper and more targeted support is need to ensure that older people can stay warm this winter and help them avoid unrepayable debt. A reformed support not a wholesale removal from many who are just above the level of means tested benefits.”

The End Fuel Poverty Coalition spokesperson added:

“This is a decision essentially made in Westminster by the Chancellor, but it is pensioners in Scotland and across the rest of the UK that will pay the price.”

High temperatures herald health fears for millions

4.5 million adults (8% of the population) have been so hot in their home that it has made them unwell in the last 12 months according to new data released by energy efficiency campaigners. [1]

The issue is now becoming such a concern that it has been dubbed the ‘Hot House Syndrome’.

The research by Opinium reveals that among specific groups, there is a much higher incidence of ill-health caused by high heat among those with preexisting health conditions or disabilities (15%).

The UK’s Adverse Weather and Health Plan warns that “there is clear evidence of increased risk from heat and cold exposure for some” and in 2023, the Bureau of Investigative Journalism (TBIJ) / University of Glasgow’s Hot Homes project revealed how poor quality housing acts like a “greenhouse” for residents trapped in “stifling” and “unlivable” homes.

Fiona Waters, spokesperson for the Warm This Winter said:

“Hot House Syndrome is a real problem caused by the UK’s appalling housing stock and affects the poorest and the vulnerable the most. The same people who suffer from damp, mouldy homes in winter are stifled in summer when the sun comes out.

“That’s because the solutions to keep us warm in the colder weather are the same as keeping us cool in summer. Better insulation, ventilation and even heat pumps that can operate in a cooling mode can all help. But the public need financial support to upgrade their homes.”

Dr Isobel Braithwaite, Public Health Doctor and housing researcher, commented:

“The complications arising from being too warm are especially dangerous among those with pre-existing health conditions and can contribute to summer being as dangerous to health as the winter in some cases.

“This research has also highlighted, for the first time, some unique insights into other groups who may be more likely to be affected by the problem.

“We know cities, and particularly bigger cities, can be on average a few degrees hotter than the surrounding countryside, hence more heat-health risks. This is often coupled with poorer-quality housing in some urban areas.”

Previous analysis has shown that low income areas are particularly vulnerable to summer heat and the new figures expand on this to also reveal that those renting from private landlords are the most likely to suffer from one of the issues related to keeping cool in summer.

The new Opinium data also indicated that people aged 18-34, those from Black, Asian and Minority Ethnic groups and those who rent from private landlords were more likely to experience heat related ill-health.

Despite public knowledge that proper home insulation keeps homes cool in summer and winter (72% are aware), previous research has found that four in ten households can’t afford to insulate their homes and need Government support.

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“The new Government will need to act quickly to improve housing standards and roll out a turbocharged programme to install more insulation and ventilation measures, especially among lower quality housing stock.”

Among the general public, 52% fully support formalised government programmes for insulation and ventilation with just 11% opposing such a plan.

Meanwhile the independent Climate Change Committee warns that “as the UK’s climate changes in the coming decades, periods of high temperature will become more common and more intense. As recent heat waves have demonstrated, high temperatures are a dangerous threat to health and wellbeing and reduce economic productivity.”

Matthew Scott, from the Chartered Institute of Housing, commented:

“The summer heatwaves of recent years offer a glimpse of what normal summer temperatures might look like in the future.

“As our world warms, this research adds to the growing body of evidence that energy efficiency and retrofit is crucial for making sure people can stay cool and healthy at home, as well as warm.”

Dr Braithwaite added:

“Whether you’re in a large city or a rural area, part of the solution to ill-health caused by heat is to ensure homes are well ventilated and insulated. This helps keep people cool in summer and warm in winter.

“Without action, heatwaves in the future will herald health fears for millions.”

At the Centre for Sustainable Energy, experts have provided low cost advice on how to keep your home cool, but as Ian Preston from the CSE adds:

“A well-insulated and ventilated home will actually help with keeping the heat out too. If you’re able to invest in insulation do so, just make sure ventilation is considered at the same time.”

Around half of the population isn’t adversely affected by excess summer heat, but for those that do suffer, problems with sleep (31%) and the cost of keeping their homes at a reasonable temperature (17%) were among the most common issues experienced in the last 12 months.

Seven measures that can help those affected in the short term, include.

If you have a fan you can use it. People are put off by the cost but the average fan uses less than 100 watts of energy so costs around 3p per hour.
Keep windows shut and curtains closed in rooms that get the sun.
Keep bowls of water around your home.
Use appliances carefully as kettles, ovens and even fridges can create extra heat.
Cooler rooms tend to be north facing and can provide a welcome respite or place to live for the more vulnerable during a heatwave.
Use a sheet instead of a duvet for humid nights.
Cool your body down by putting your feet in cool water or putting a cold towel over your shoulders.

ENDS
[1] Opinium conducted an online survey of 2,185 nationally and politically representative UK adults between 29th and 31st May 2024. On a nationally representative sample of 2,185 UK adults, 184 have been so hot in their home that they have been unwell in the last 12 months. 184/21

Letter to the Chancellor on Winter Fuel Payments

Charities have written to Chancellor, Rachel Reeves MP, to set out the challenge now faced by pensioners this winter and ask the Government to reconsider its plans to axe Winter Fuel Payments.

The full text of the letter is below.

To:

Rt Hon Rachel Reeves MP, Chancellor of the Exchequer

Copied to:

Rt Hon Ed Miliband MP, Secretary of State for Energy Security and Net Zero

Rt Hon Liz Kendall MP, Secretary of State for Work and Pensions

Rt Hon Darren Jones MP, Chief Secretary to the Treasury

Miatta Fahnbulleh MP, Minister for Energy Consumers

Monday 5 August 2024

Dear Chancellor,

The Winter Fuel Payment to pensioners has been a settled part of support to help older people stay warm each winter for years.

The decision to remove the Payment to all but a small minority of pensioners will see millions more older people face the prospect of spending this winter in cold damp homes.

This has the potential to create a public health emergency. The impact of living in cold damp homes is particularly harsh on those older people with a disability, a long term health condition or with poor mental health.

It results in these people turning to an NHS that is already under stress and in some cases, can result in additional winter deaths.

We understand the arguments for means testing the benefit, but the approach you have taken is the wrong one.

We urge you to rapidly consult with consumer groups to broaden the targeting of the Winter Fuel Payment, to introduce support to end energy debt, expand the Warm Home Discount and extend the Household Support Fund.

For the medium term, we recommend that the Government reforms standing charges and consults on how a social tariff could protect the most vulnerable in society from the cost of energy.

We have publicly commended the Government in taking some of the long term measures to tackle high energy bills, such as the drive for more renewable energy and a Warm Homes Plan. But these solutions will take time to bring down bills.

Energy bills are due to increase further on 1 October, meaning that a pensioner who no longer receives Winter Fuel Payment, will experience a real-terms increase in their energy bills of up to 15% in winter 2024/25 compared to winter 2023/24.

Unless we see urgent action from the Government to keep people warm this winter, one of the first actions of the new Government will be to condemn more vulnerable households to fuel poverty.

We would be happy to meet with you to discuss this further.

Yours sincerely,

End Fuel Poverty Coalition

Disability Poverty Campaign Group

Fuel Poverty Action

National Pensioners’ Convention

Disability Rights UK

Warm This Winter

350.org

Community Action Northumberland

Advice for Renters

Fairer Housing

Scope

Green Rose CIC

MND Association

The Printing Charity

VOICES ADFOCAD

Surrey Coalition of Disabled People

Bringing Us Together

Independent Age

Agewell CIC

Adult Social Care Warriors

Zero Hour

The Working Class Climate Alliance

38 Degrees

High Peak Green New Deal

Voluntary Organisations Disability Group (VODG)

Community Housing Cymru

Hackney Foodbank

Equal Right

Global Witness

Harrow Association of Disabled people (HAD)

Bristol Reclaiming Independent Living

WinVisible (women with visible & invisible disabilities)

The Climate Coalition

Community Money Advice

Climate Cymru

Clynfyw Care Farm

Stop Climate Chaos Cymru

Pontypridd Land Society

Awel Amen Tawe

Cardiff Quakers

Ffynnone Community Resilience

Climate and Community

Tir Natur

Egni Cooperative

The Coproduction Network for Wales

Climate Shop

Gwyrddni

The One Planet Centre

The Mentor Ring

Sustainable Wales

Datblygiadau Egni Gwledig

XR Cardigan

Friends of the Earth

Medact

Image Credit: Martin Suker / Shutterstock

Pensioners face surge in winter energy bills

The Chancellor’s decision to cancel the Winter Fuel Payment for most pensioners will leave millions of older households facing an inflation-busting energy bills increase this winter.

A combination of the end of the Winter Fuel Payment and a likely increase in energy prices from 1 October will mean that the average older household will see their energy bills increase by up to 15% in real terms, compared with winter 2023/24. [1]

Charities have written to Rachel Reeves MP this week to set out the challenge faced by pensioners and ask the Government to reconsider its plans.

The letter, signed by over 50 organisations, says:

“The decision to remove the Payment to all but a small minority of pensioners will see millions more older people face the prospect of spending this winter in cold damp homes.

“This has the potential to create a public health emergency. The impact of living in cold damp homes is particularly harsh on those older people with a disability, a long term health condition or with poor mental health.

“It results in these people turning to an NHS that is already under stress and in some cases, can result in additional winter deaths.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“In the meantime, households of all ages will need more support from the Government to stay warm this winter, not less.

“We urge the Chancellor to rapidly consult with consumer groups to broaden the targeting of the Winter Fuel Payment, to introduce support to end energy debt, expand the Warm Home Discount and extend the Household Support Fund.”

The letter ends by warning ministers that:

“Unless we see urgent action from the Government to keep people warm this winter, one of the first actions of the new Government will be to condemn more vulnerable households to fuel poverty.”

Members of the public have also been asked to write to their MPs through the Warm This Winter campaign or the Independent Age website urging the Government to think again. Hundreds of thousands of people have also signed petitions on the Age UK and 38 Degrees websites. [2]

National Pensioners Convention General Secretary Jan Shortt commented:
“I seriously believe the Chancellor has underestimated the harm her decision will cause to older people still struggling with energy costs and facing higher rates in October. It is absolutely shocking that the new Labour government should treat older, vulnerable people in this manner. The triple lock alone will not enable them to keep up with energy bills.”

Jonathan Bean from Fuel Poverty Action added:

“Making heating even more unaffordable for those trying to survive on basic pensions is a cruel and reckless move that will cause widespread suffering, and increased NHS admissions this winter. Instead we need an energy pricing system that guarantees everyone the essential energy they need to stay warm and safe.”

Jacky Peacock from Fairer Housing said:

“While it makes sense to withdraw the payment for wealthy pensioners, the bar has been set too low. We’re asking the Chancellor to re-think this move to allow pensioners on modest incomes to enjoy their home in comfort this winter without the worry of how they will be able to afford it.”

Jenna Fansa from Hackney Foodbank commented:

“We urge the government to widen the eligibility criteria for Winter Fuel Payments. Last year we saw a 95% increase in the number of older people coming to our food bank due in part to rising food and fuel costs. For many, it’s a choice between having the heating on or going hungry. Restricting the criteria only to those on certain benefits will cause more anxiety for many pensioners and will inevitably bring more pressures for food banks like ours.”

Morgan Vine, Head of Policy and Influencing at Independent Age, said:

“It is not an overstatement to warn that, in its current form, this sudden change puts lives at risk. Pension Credit has an unacceptably low take-up at just 63%.

“This means up to a staggering 1.2 million older people who are eligible could be missing out on money they need to turn their heating on. On top of this, every day we hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline.

“We urge the Chancellor to not make this change now, and instead ensure every older person has an adequate income to avoid financial hardship before removing the Winter Fuel Payment.”

Ken Butler, Welfare Rights and Policy Officer at Disability Rights UK said:

“The removal of winter fuel payment from millions of pensioners, many of them Disabled people, is shameful. Many pensioners live on the margins of poverty and need more heat and energy to manage their health conditions and charge their health-related equipment.

“In addition, due to a DWP backlog assessing pension credit claims, award decisions are taking several months to be made. Because of this, many eligible pensioners could miss out on fuel payments this winter.”

ENDS

For a full copy of the letter visit: https://www.endfuelpoverty.org.uk/letter-to-the-chancellor/

[1] Average energy bills in winter 2023/24 were GBP1,834 – but for households receiving the full GBP300 Winter Fuel Payment this would have been GBP1,534.

Average energy bills for winter 2024/25 are forecast to be GBP1,762 according to analysts Columbia Threadneedle (accessed 22 July 2024). This means the average household who received the full Winter Fuel Payment in 2023/24 will now pay 14.68% more for energy in winter 2024/25.

[2] Age UK petition stands at over 138,000 and the 38 Degrees petition stands at over 105,000 as at 1500 on 2 August 2024

Charities condemn Chancellor’s Winter Fuel Payment decision

Charities have lined up to condemn the new Chancellor’s decision to restrict the Winter Fuel Payment (WFP) to a smaller group of older households.

Age UK estimate that more than 800,000 older people living on very low incomes – under £218.25 a week for single pensioners and under £332.95 for couples – who are already missing out of the Pension Credit, will now lose the WFP that helps them to pay their fuel bills.

In addition, the charity estimates that there are also about a million pensioners whose weekly incomes are less than £50 above the poverty line, who will also be hit hard by the loss of the Payment.

Finally, older people whose incomes are a little higher, but who live in energy inefficient homes and/or who are seriously unwell and need to keep the thermostat turned up high in order to protect their health will also suffer.

This equates to around 2m pensioners forced into fuel poverty. In addition, Warm This Winter data suggests that another 2.9m pensioners will now face financial difficulty this winter due to the decision. [1]

Caroline Abrahams, charity director at Age UK said:

“We strongly oppose the means-testing of Winter Fuel Payment (WFP) because our initial estimate is that as many as two million pensioners who badly need the money to stay warm this winter will not receive it and will be in trouble as a result – yet at the other end of the spectrum well-off older people will scarcely notice the difference – a social injustice.

“It is well established that pensioners tend to do everything possible to avoid going into debt so if they are worried about their future energy bills we know their likely response will be to ration their fuel use and economise by reducing their spending on other essentials. This proposed policy change is therefore certain to result in more older people experiencing a horrible ‘eating or heating’ dilemma.

“Means-testing WFP this winter, with virtually no notice and no compensatory measures to protect poor and vulnerable pensioners, is the wrong policy decision, and one that will potentially jeopardise their health as well as their finances – the last thing they or the NHS needs. With winter now just over the horizon, the Government should halt their proposed change to WFP and think again, given the clear evidence of how it will hurt the older people who need it the most.”

National Pensioners Convention General Secretary Jan Shortt said:
“This is devastating news for millions of older people whose income is literally just a few pounds above the threshold to receive pension credit.

“These people are already barely able to make ends meet – this move effectively wipes out any benefit they receive from the triple lock increase on the state pension.

“I seriously believe the Chancellor has underestimated the harm her decision will cause to older people still struggling with energy costs and facing higher rates in October. It is absolutely shocking that the new Labour government should treat older, vulnerable people in this manner. The triple lock alone will not enable them to keep up with energy bills.”

Matt Copeland from National Energy Action commented:

“Today the Chancellor announced that the Winter Fuel Payment will only be given to pensioners receiving benefits going forward. Although this would make the policy more progressive, it will leave many pensioners who need support, without it. One third of fuel poor households do not receive benefits. They should not be forgotten.

“Energy prices remain high and are due to increase again this winter. This creates a significant challenge for low income households. Any funds raised from this policy change should go towards helping low income and vulnerable energy customers this winter as a priority.”

A spokesperson for the End Fuel Poverty Coalition added:

“When Rishi Sunak threatened to axe Winter Fuel Payments in September 2023 we said that this could be a death sentence for pensioners who are only just about managing to keep out of fuel poverty.

“Nothing has changed.

“Energy prices are still high, people are still struggling with the cost of living and this dangerous decision by the Chancellor could condemn pensioners to living in cold damp homes this winter.

“Figures for the Warm This Winter campaign suggest that almost half of over 75s could now see their winter heating budget torn to shreds as they have modest incomes and will not now be eligible for the payment.

“The Chancellor must urgently think again and consult with older people’s charities on a better way to target this support to a wider group of pensioners.”

Jonathan Bean from Fuel Poverty Action, said:

A spokesperson for Independent Age commented:

“Today’s decision to end the Winter Fuel Payment for those not receiving Pension Credit risks driving hundreds of thousands of older people into further financial hardship. We welcome the Chancellor’s intention to tackle the low uptake of Pension Credit, however means testing the Winter Fuel Payment now will mean too many older people will fall through the cracks and not get the vital financial support they desperately need, especially when household bills like energy are still extremely high.

“Pension Credit has an unacceptably low uptake at just 63%. This means a staggering 880,000 older people who are eligible could be missing out on money they need to turn their heating on. On top of this, every day we hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline.

“We understand the UK Government needs to make some tough choices, but today’s announcement demonstrates just how important it is for all older people facing financial hardship to receive the money they are entitled to. We also hope the new UK Government will take this opportunity to work cross party to determine what an adequate income in older age is and ensure that everybody receives it so that nobody lives in poverty in later life.”

ENDS

[1] 2m based on Age UK calculations. 2.9m based on Opinium data for Warm This Winter (December 2023) and based on the number of pensioners with an income of GBP20-30k a year combined with population estimates from the ONS.