Credit, Collections & Insolvency News
A new report by Age UK has warned that groups of pensioners are still struggling with the cost of living, with one in three (34%), equivalent to 4.1 million pensioners stating that they felt less financially secure heading into 2025 compared to when 2024 began.
The Charity’s new report highlights its concerns about the impact on older people of energy costs that just keep rising and the struggles older people face affording the basics, especially after the loss of the Winter Fuel Payment for many on low and modest incomes, including those with health conditions.
From April 2025, energy prices will be more than 50% higher than at the beginning of 2022 and while inflation has fallen close to its pre-2022 levels – with CPI at 3% in January 2025 – prices of everyday goods like groceries remain elevated at a high level compared to the past.
Despite the ongoing financial pressures, Age UK’s research also found that three in five (59%) pensioners who have cut back on heating or powering their home – equivalent to 2.9 million – would rather turn off their heating than get into debt – rising to 65% for women pensioners.
The Charity is hugely concerned by this finding, as it confirms what Age UK services are picking up via its national Advice Line and Age UK Network – that millions of older people prefer to ration their energy consumption rather than go into debt with their energy supplier.
The Government’s proposals to expand the Warm Home Discount scheme in winter 2025/26 are welcome. Electricity bill discounts of £150 could support an extra 2.7 million households (of all ages). However, future energy price rises – including the £111 average rise in April 2025 – mean that a £150 discount will leave few people better off. As welcome as it is, Age UK believes this additional support will not be enough to make a meaningful difference to the warmth and safety of many people’s homes and that a more effective long-term solution is needed to help older people struggling to stay warm at home.
Caroline Abrahams CBE, Charity Director at Age UK said “The remorseless upward trend in our energy bills has been a nightmare for many pensioners in recent years, particularly if they are on low-to-modest incomes, living with a disability or health condition, or in poorly insulated homes that are expensive to heat.
“We often hear directly from pensioners about how anxious and distressed they are about being able to afford the essentials like energy and food. Our research confirms that most would prefer to ration their heating in a way that could be detrimental to their health if that’s what it takes to avoid going into debt. This is important from a policy perspective because a lot of the support on offer if you are struggling to pay your energy bills focuses on rescheduling your debt, but that’s not going to help all those older people who will do anything and everything to stay out of debt in the first place.
“Looking ahead to next winter and others to come, our research underscores that we need to do more to support older people to have the confidence to run their heating when it gets cold, especially if they are on low and modest incomes, with a disability or renting. The fact that their energy costs are so much higher today than they were in the past has really spooked many of them and you can see why: if you are living on a tight fixed income there’s simply not the flex to keep paying more. It’s true that the triple lock is helping but our research demonstrates that it’s not enough on its own, some additional effective policy interventions are required. We are keen to work with the Government on what these could be and, more broadly, part two of the Government’s Pension Review, which is expected to consider pension adequacy, cannot get underway too soon.”