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Older people cut energy use amid rising prices

Report finds complex patterns of over 50s spending

Bills calculating

When those over 50 face energy price increases, rich and poor alike are forced to cut consumption – but middle-income households cut back the most, figures released today have found.

A report by the Institute for Fiscal Studies found that the poorest fifth of older households cut energy consumption by about seven per cent, the richest fifth by five to eight per cent – but the middle fifth by 11 to 12%.

The report analysed 2004-7 data from the English Longitudinal Study of Ageing, during which time pensioners saw their gas bills jump by 55% and electricity bills by 36% (in the two years to April 2007). 

Fuel cost pressure

Age Concern and Help the Aged, who jointly funded the report, warned that further price rises seen during 2008 would have increased the pressure on older people, forcing many of them – especially pensioners – to turn down the heating or cut spending in other areas in order to afford their energy bills.

‘Shockingly, the report finds that while poorer pensioners are spending more of their available income on energy, they are – at the same time – reducing the amount of energy they buy,’ Andrew Harrop, head of public policy at Age Concern and Help the Aged said.

The report said some pensioners were resorting to ‘turning down the heating or staying in bed to save on bills’.

Older spending habits

The report also looked at the UK Expenditure and Food Survey, which found some significant differences in spending between pensioner and non-pensioner households. 

The proliferation of and home internet appeared to have largely passed pensioners by: their spending on stamps and telecommunications rose by only 28% from 1995 to 2007, compared to 70% for non-pensioners.

Local taxes also saw age-determined dividing lines. Here pensioner households’ spending grew by 84%; non-pensioner households’ by 68%. While spending on local taxes made up only four per cent of total budget for non-pensioners, that rose to over seven per cent for all pensioners and nearly nine per cent for those over 80.

The Which? guide to council tax tells you everything you need to know about your rights and responsibilities in this area.

Which? Switch

Switching energy supplier is one way of potentially cutting your energy bills significantly, as 73-year-old Which? Switch customer Brian Page found out. Those switching with Which? Switch between August and December 2008 saved an annual average of £257.

We’ve also practical tips on how to cut your energy costs and how to create a more energy efficient home.

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