Community     March 18, 2022

The Impact of Inflated Energy Prices on the Older Population

With energy prices increasing by an average of £693 per household per year, we take a closer look at the impact it will have on the older population within the United Kingdom and the support that is available to help people pay for their energy bills.

Following an announcement from Ofgem, the UK’s independent energy regulator, we are soon to witness the cost of our energy bills jump up by an average of 54% across 22 million households throughout the UK due to the energy price cap rising substantially.

According to National Energy Action (NEA), the price of heating in an average UK household will likely double within an 18-month period. The NEA also said that the number of households in fuel poverty will soar from four million to 6.5 million households across the UK in as little as six months.1

Soon after the announcement from Ofgem, Chancellor Rishi Sunak announced a £9 billion support package to help stifle rising energy prices, with increased charges set to be brought in from April 2022. The Chancellor’s support package includes a £200 discount for customers to help tackle their energy bills, as well as a £150 allowance on council tax bills, and a £150 bonus to support the most vulnerable of households that will be affected.1

The stark rise in energy prices is expected to impact the elderly quite extensively, particularly those of our older population who would be classed as vulnerable due to living alone; on low-income pensions or living with long-term medical conditions.


How much extra will I be paying?

From the 1st of April this year, households will be waking up to new and increased energy bill rates.

Standard tariff customers will see an average increase of £693 per year, with their bills going from £1,277 per year to £1,971. Prepay customers will see an average increase of £708, with their bills rising from £1,309 to £2,017 per year.2

We know that this news may have come as a shock to the system for a lot of people, especially amongst the older generation. Remember, the amount your energy bills will increase depends on how much energy you use. Read our tips on saving money and lowering your energy consumption.

A full breakdown of the enhanced energy prices can be found on the Ofgem website.

Image from Ofgem

These are unprecedented times we’re living in. However, there are lots of ways you can cut costs in other areas of your household – you just need to be ‘switched-on’ and cautious about what gadgets you use around the house and when.

For example, we recommend thinking about the amount of time you spend watching television, or whether you should switch to a streaming service that works out cheaper than paying £159 for a TV license.

You should also be wary of not leaving your phone on charge overnight, something we all do that slowly adds to our energy bills.

We have shown great togetherness throughout this pandemic, and there are always reasons to remain upbeat and positive, so ensure you check in with the vulnerable and help them keep their mind at rest. These aren’t easy times, but we will get through this together.

In need of some money-saving ideas?

We’ve put together our top tips for older people to save money in 2022.
Take me there


Why are energy prices rising?

There are a number of factors as to why the energy price cap is rising in April, and it isn’t just an issue in Britain. It is a worldwide problem.

Last year, the covid-19 pandemic was rife, and it had a knock-on impact with energy prices now rising almost everywhere in the world. Furthermore, it was an extremely cold winter throughout Europe last year, which has seen a significant increase in the demand for stored gas supplies.

The pressure companies have been put under throughout the last few years has so far resulted in 28 energy firms collapsing, with approximately two million people nationwide losing their energy provider. Since August of last year, it is believed 2,076,800 domestic customers and a total of 58,300 non-domestic customers have lost their suppliers.3

Ian Preston of the Centre of Sustainable Energy alluded to the fact he wasn’t shocked about the collapse of various energy firms worldwide. He revealed the following:

“We’re not surprised by this new analysis revealing how widespread the issue is around collapsing energy suppliers. Our advice line has seen thousands of households reaching out for support because they’re worried about their energy supplier going bust, horrified at deals they are being offered and not being able to find a better price.” 4

Energy prices in Europe could also be further impacted by rising tensions between Russia and the West, as Russia is, after all, the biggest single supplier of gas to the region, satisfying around 40% of its overall demand. Here in the United Kingdom, we rely on a significantly lower percentage of Russian gas – about 3%. However, if the conflict continues to ensue between Russia and Ukraine, gas prices could inflate further here in the UK– as it has a knock-on effect for all European countries due to the power Russia possesses in terms of oil supply. A price rise in mainland Russia could also mean a steep rise in energy prices here, too.

Hakan Frisen, the Head of Economic Forecasting for Swedish financial group SEB, warned:

“a Russian invasion of Ukraine could have “almost incalculable consequences for energy prices” across the continent, as President Vladimir Putin may decide to weaponise gas supply as leverage.” 4

Chief Executive of Ofgem, Jonathan Brearley, said:

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 20-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas”. 5

Ofgem is now working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.


What is the energy price cap?

The energy price cap sets a limit on the amount suppliers can charge for the gas and electricity you use at home. It affects approximately 11 million people in the UK who are on standard or variable tariffs.

The price cap prevents energy suppliers from passing higher wholesale energy prices to the consumer and is reviewed by Ofgem every six months.

It was introduced by the energy regulator Ofgem in 2019, with an aim to prevent millions of households who were often paying expensive standard or default variable tariffs.

The current cap is £1,277, which was set in August 2021. This is a 12% increase against the price before that.


Who is Ofgem?

Ofgem is the UK’s independent energy regulator. It is their job to protect energy consumers, particularly vulnerable people, which includes the elderly. They do this by ensuring they are treated fairly and profit from a cleaner, greener environment.

Ofgem is responsible for the following:

  • Working with government, industry, and consumer groups to deliver a net-zero economy, at the lowest cost to consumers
  • Stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable
  • Enabling competition and innovation, to drive down prices and results in new products and services for consumers.

When the government sets out its policies for the energy sector, they propose any changes to Ofgem. Ofgem then reviews and regulates those policies, ensuring that consumers are treated fairly and, where necessary, protecting consumers’ interests.

As a statutory framework, Ofgem also has the capacity to investigate government and company behaviours relating to energy. As a result, Ofgem can potentially impose fines and enforcement orders on companies that have been caught breaching protocols that they believe may breach consumer protection laws or competition legislation. 3

Ofgem also has a clear role to support policy issues, which includes things like decarbonisation.


What support is available for the elderly population?

With a reported 9.4 million people aged over-65 concerned about the rising cost of living7, we have compiled a list of options available to UK households that will help to manage rising energy and living costs.

In need of some money-saving ideas?

We’ve put together our top tips for older people to save money in 2022.
Take me there

Financial support from the UK government

Chancellor of the Exchequer Rishi Sunak has recently announced a package of financial support available to people living in the UK.

Energy Bill Rebate

Domestic electricity customers will receive a £200 discount on their energy bills in Autumn 2022, which will be paid back automatically over the next 5 years. This applies to England, Scotland and Wales.

Council Tax Rebate

A Council Tax rebate of £150 for bands A-D in England, with Wales and Scotland offering the same non-repayable discount, starting in April 2022.

Discretionary Fund

For any who are not eligible for the Council Tax Rebate, there will be a £144 million-pound Discretionary fund available for billing authorities to support households who are in need, which will be made available in March 2022.

Additional Help

Other schemes are available to help reduce the cost of energy bills, including Winter Fuel Payment and the Warm Home Discount Scheme.

Our top tips for people in later life to save money

With the news of the energy price cap rising and the cost-of-living increases that are causing concern for many of our customers, we devised a list of top tips for people in later life to save money in 2022.

Find out if you can downgrade your lifeline alarm plan

If you have a lifeline alarm (also referred to as a careline alarm or pendant) that is monitored by a response team, give your service provider a call and ask them if there is anything they can do to help you bring down the cost of your plan.

Are you already a Telecare24 customer? We are happy to offer a number of options available to you when it comes to renewing your plan.

When your plan is due for renewal, give our friendly customer service team a call and ask how we can help you manage your payments. Depending on your circumstances, such as the plan you’re on or how you’re currently making your payments, we can look at the possibility of switching your payment frequency, helping your monthly cash flow.

If you are not concerned with falling and you have a Fall Alarm plan with us, we may be able to downgrade your plan and switch you to our Pendant Alarm plan.

People who have a careline alarm system that is not monitored by Telecare24 should contact their service provider and ask what options are available to help them save.

New customers should keep an eye on our offers

If you’re looking to have a lifeline alarm system installed in your home but are worried about the cost, we regularly run offers and promotions that can help you save on the cost of your service. Sometimes it’s a discount on the price of a plan. On occasion, we also give away free equipment such as a spare pendant (handy to keep in rooms you use often) or a free key safe that makes accessing your home easier for loved ones who you trust with the code.

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In addition, every order we receive this month will be entered into a prize draw for the chance to win a year’s free monitoring.

Read the incredible stories from our winners so far.


Sources

1 https://news.sky.com/story/energy-price-cap-rises-households-will-be-in-deep-peril-and-older-people-will-be-badly-shaken-by-increase-in-bills-charities-warn-12532343

2 https://www.bbc.co.uk/news/business-58090533

3 https://inews.co.uk/inews-lifestyle/money/bills/energy-prices-why-going-up-price-cap-rising-ofgem-announcement-bills-explained-1439602

4 https://inews.co.uk/news/gas-crisis-two-million-homes-impacted-collapse-energy-suppliers-so-far-1304759

5 https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april

6 https://www.ofgem.gov.uk/about-us/our-role-and-responsibilities

7 https://www.ageuk.org.uk/latest-press/articles/2022/three-quarters-of-over-65s-admit-theyre-worried-about-rising-cost-of-living/

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