Energy firms should unite to give pensioners a £50million energy bill rebate this winter to help those in fuel poverty, according to Age Concern and Help the Aged. The call comes as bosses of the ‘big six’ energy companies are summoned before MPs, at a select committee meeting later today¹, amid predictions of 40% price hikes in energy bills this year.²

Energy firms have already committed to spending an extra £50million on social assistance schemes this year.³ But despite rapidly rising levels of fuel poverty, they have not indicated how this money will be spent. The charities are calling on the ‘big six’ to join forces and work with the Government to use this money to fund a ‘fuel voucher’ scheme to help their older, more vulnerable customers through the deepening fuel poverty crisis.

As an urgent, short-term measure, the charities are calling on energy companies to redeem fuel vouchers, worth £50 each, sent by the Government to all pensioners over 70 who are entitled to Pension Credit.⁴ Alongside the one-off increase in this year’s Winter Fuel Payment, this could mean that some pensioners receive up to £450 to help them heat their homes this winter.⁵ The voucher scheme could form part of a high profile campaign by the Government to ensure that all pensioners claim the benefits they are entitled to as part of an emergency package to help pensioners cope with rising energy costs this winter.⁶

Gordon Lishman, Director General of Age Concern, said:
“If the energy companies really care about their most vulnerable customers, they should join forces to maximise the help available to fuel poor pensioners this winter – excuses about competition will not wash. £50 is by no means enough, but alongside the Winter Fuel Payment it would at least offer some comfort to millions of pensioners facing a bleak winter. Let’s be clear though, this emergency relief would not absolve the Government of responsibility for delivering the long term measures needed to tackle fuel poverty. So far, ministers have been sleepwalking through the fuel poverty crisis.”

Mervyn Kohler, Special Adviser to Help the Aged, said:
“The challenges of climate change and fuel poverty are hugely serious, but the rhetoric of the Government is not being matched by its actions. Two weeks ago, new figures revealed that 2.5m pensioners are living on incomes below the poverty line – some 23%. These pensioners are finding their resources increasingly stretched further by fuel and food price hikes. The Government and energy industry must work much harder to reduce the increasing worry, pressure and fearfulness in our older population.”

Ahead of today’s evidence session, the charities are also renewing their call for the Government to introduce mandatory social tariffs for vulnerable households through the Energy Bill to ensure that the poorest customers don’t end up paying more than other customers.

 

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Notes to editors

1. The Department for Business, Enterprise and Regulatory Reform (BERR) Select Committee meeting is scheduled to start at 9.30am on Tuesday 24 June.
2. Prediction of a further 40% increase in energy bills this year were widely reported in the media last week.
3. In April, BERR announced that energy suppliers will spend an additional £225million over the next three years (£50million in 2008) on social programmes to help vulnerable households and those on low incomes to heat their homes. This will bring the suppliers’ annual spending on these programmes up to £150million by 2011.
4. The £50 vouchers could be sent alongside the Winter Fuel Payment.
5. The Budget in April announced a one-off increase of £50 in the Winter Fuel Payment for over 60s and £100 for over 80s. This means that this year, people over 60 will receive a payment of £250 and people over 80 will receive £400.
6. Up to £5billion in money benefits is currently unclaimed by pensioners.

 

• Help the Aged has joined forces with Friends of the Earth to seek a judicial review of the Government’s fuel poverty strategy which is judged to be woefully short of reaching the 2010 target of eradicating fuel poverty among vulnerable households. 
• There are currently 2.1million pensioners living in poverty (after housing costs) – this equates to 2.5million pensioners before housing costs are taken into account.

 

FACT FILE

• Older people are more likely to be affected by fuel poverty than any other group. Age Concern estimates there are now more than 2.25 million older households in fuel poverty in the UK. If energy prices go up by 40% by the end of the year as widely predicted, this could increase by 800,000 to over approximately 3 million.
• Almost 1 in 5 UK households – an estimated 4.5 million – are now living in fuel poverty. If energy prices go up by 40%, this could rise to around 6 million households.
• Energywatch estimates the average annual energy bill is now £1058. Predictions of a 40% increase in energy prices this year could see the average annual energy bill increase to £1481.
• When the £200 Winter Fuel Payment was first paid it covered over a third of the average fuel bill – it now covers less than a fifth.
  

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