Bill freeze saves half state pension from energy sinkhole


Freezing energy prices will now prevent half of the state pension from being eaten up by household bills.

Pensioners will now spend 20% of the benefit on energy bills next year, up from 58% expected after Liz Truss intervened to protect homes from the worst of the gas and electricity price crisis .

Following the action, a typical household will spend no more than £2,500 on energy bills over the next two years, falling to £2,100 due to the £400 energy discount.

Pensioners would have had to spend almost two-thirds of the state-paid benefit on energy bills under previous forecasts, with energy consultant Cornwall Insight predicting just weeks ago that the cap would rise to £5,387 in January before rising again in April. at £6,616.

The state pension increases each year under the ‘triple lock’, ensuring that payments increase at the height of inflation, wage growth or 2.5%.

As a result, the state’s new full pension is due to rise to £10,600 next April, with an average payout of £9,623 a year.

It was feared that three-quarters of this sum would be earmarked for powers bills. Yet the energy crisis will still wipe out a much larger share than in previous years, absorbing 22% of the state’s full pension this year. This is compared to just 14% of the state pension last winter when the energy price cap stood at £1,277.

However, many people will receive less than the full allowance because they have not contributed to National Insurance for the required number of years, meaning that more of their pension will go towards heating.

Caroline Abrahams, from the charity Age UK, warned that the freeze would also not go far enough for those who are entirely dependent on the state pension.

Older households tend to have higher energy costs, particularly due to disability and poor health, or live in homes that are very expensive to heat.


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