The 'extremely concerning' energy bill reality for Scotland that is a 'hard pill to swallow'
Ministers have been urged to reconsider axing the winter fuel payment for millions of pensioners, with charities describing another energy bill increase this winter after the regulator raised its price cap as “extremely concerning”.
Ofgem has confirmed household energy bills are to rise again from January 1 as it announced a 1.2 per cent increase to its price cap.
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The regulator said the increase would see the typical bill for a household in Scotland, England and Wales increasing from £1,717 to £1,738-a-year, or by around £1.75-a-month.
It represents a fresh blow for the public, following the price already rising by 10 per cent in October.
Sir Keir Starmer said on Friday it “makes sense to make the change” to winter fuel payments, but there were decisions made in the Budget which he would have preferred “not to have had to make”.
The payment is being restricted to only those claiming pension credit from this winter, with the aim of saving the public purse £1.5 billion a year. The Scottish Government has replicated the decision north of the Border.
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Hide AdWhen asked about warnings that more pensioners may go into poverty as a result of making the benefit means tested, Sir Keir said: “Without the change that we’re putting in place at the moment, the allowance goes to everyone, whether they need it or not, and therefore there are many who don’t need it because they’re relatively wealthy.
“And I think most people would say that doesn’t make sense, when you’ve got a really, really, difficult, tight budget – we’ve got to deliver for our NHS, for our schools, we’ve got to make sure that we’ve got public services that people can rely on, including, of course, pensioners. So it makes sense to make the change.”
Independent Age, a charity supporting older people, called the energy cap announcement "extremely concerning".
Chief executive Joanna Elson said: “Earlier this year, it was predicted that energy bills would start to fall from January 2025, so this will be a hard pill to swallow for those in later life worried that their budgets were already stretched to breaking point. Now they will need to find extra money to cover their rising bills.
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Hide Ad“This bill increase will arrive right in the middle of winter, a period we anticipate will be very tough for millions of older people. That’s because the latest figures show that almost one million eligible older people do not receive pension credit, meaning they will no longer qualify for the winter fuel payment despite living on a low income. We are also worried about the older people that live just above the pension credit threshold, sometimes by just a few pounds. They will now lose a vital lifeline during a period of increased energy costs.
“We are running out of time, but it’s not too late for the UK government to reconsider its plan to means test the winter fuel payment. It’s misguided and will see far too many older people fall through the cracks.”
Tim Jarvis, director general of markets at Ofgem, said: “Our reliance on volatile international markets, which are affected by factors such as events in Russia and the Middle East, means the cost of energy will continue to fluctuate. So it’s more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.”
Ofgem has urged customers to take advantage of increasing choice among suppliers and look for the best deal to help keep their bills down, saying households could save up to £140.
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Hide AdThe latest price cap is 10 per cent or £190 lower than a year earlier, and 57.2 per cent or £2,321 less than during the energy crisis, which was fuelled by Russia’s invasion of Ukraine in February 2022.
But it comes as millions of pensioners are facing a winter with less support, after the new UK government decided to scrap winter fuel payments for those who do not receive pension credit or other benefits. This means around ten million pensioners will miss out on the payments of up to £300 this year.
Derek Mitchell, chief executive at Citizens Advice Scotland, urged those struggling to contact their local Citizens Advice Bureaux [CAB].
He said: “The reality is that any increase in energy costs is bad news. Energy prices remain too high and force people into impossible situations. It limits choices when it comes to bills and household spending, often leading to people rationing or stopping the use of heating completely.
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“As the days get colder and darker, especially over the past week, thousands across Scotland face the misery of living in a cold home, impacting both their physical and mental wellbeing.
“Across our network, the average person seeking debt advice has £2,500 of energy-related debt with many on low incomes. And unfortunately, our energy markets are broken. Urgent and targeted solutions, including a social tariff and debt write off schemes, are needed to help people not only stay warm, but have a realistic way to pay debts back.
“If you or someone you know is worried about energy costs, please visit your local CAB where an adviser can provide the support needed.”
Consumer Scotland head of energy Kate Morrison said: “One of the legacies of the past two years of high bills has been a growth of energy debt and arrears in the GB domestic market, which now exceeds £3.6bn – a record high – and bill increases will impact further on levels of debt”
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Hide AdShe added: “There is a need for governments to design and deliver better targeted energy affordability support for consumers, particularly given current levels of debt and ongoing pressure on household budgets.”
UK Energy Secretary Ed Miliband said: “The rise in the energy price cap will cause concern for families struggling with the cost of living. That is why the government will do all we can to help people.
“We are taking action to insulate homes, providing the Warm Home Discount to three million families, driving increased take up of pension credit, and working with suppliers to ensure there is help available for the most vulnerable customers.
“As long as Britain remains exposed to the rollercoaster of global fossil fuel markets, we will be vulnerable to energy price rises over which we have no control.”
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