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Life Becoming Unaffordable for Pensioners on Low/Modest Incomes, Warns Age UK

Life is fast becoming unaffordable for many older households on low and modest incomes, with millions unable to pay for basic items, according to a new report published today by Age UK.

In its new report, It Doesn’t Add Up, the Charity is warning that those on the very lowest incomes are spending almost a fifth (18 per cent) of their after-tax household income on energy bills because of April’s price cap rise, with one in three older households (29 per cent) in England ‘fuel-stressed’– spending more than 10 per cent of their post-tax income on energy bills to maintain an adequate standard of warmth.

With inflation at a 40-year high – and warnings of worse to come – Age UK is estimating that two million older households won’t have enough money to cover their essential spending over the next year.

Higher prices have resulted in older households on the lowest incomes unable to cover essential day-to-day costs, with an increasing number turning to Age UK’s national advice line for support. From January to March this year, Age UK’s Advice Line saw an eight per cent rise in calls compared with the same time last year, a significant increase on the already high numbers of calls taken during the Covid-19 lockdown in early 2021.

Calling on the Government to get a grip on this growing crisis, the Charity is urging Ministers to bring forward a package of measures to support those who lack the income and resources to cope with rising inflation. Measures should include:

  • Raising the level of benefits and the State Pension during this financial year so they keep pace with inflation.
  • Targeting a direct one-off payment of £500 to those on the lowest incomes to help mitigate the impact of energy price rises.
  • Introducing improved social tariffs into the energy market.
  • Doing more to ensure everyone eligible for benefits such as Pension Credit receives their entitlement.

Even before Ofgem’s warning this week that the energy price cap is likely to surge to £2,800 in October – an increase of around £800 a year on the average bill – many older people were looking ahead with trepidation and increasingly using desperate coping strategies to cover their essential costs. Many older people are now only leaving home for health appointments and have cut back on seeing grandchildren, family and friends, to save on fuel and travel costs – leaving them feeling lonely and isolated. Some are going to extreme lengths such as eating just one meal a day or showering just once a fortnight in a bid to keep costs down, whilst others are going without dental treatment, cutting their own hair, borrowing money to buy heating oil, and staying in bed all day to stay warm.

The report outlines how people with disabilities and those caring for them face higher costs to keep safe and well. Even as the weather gets warmer, they still need to use significant amounts of energy for things like doing a lot of laundry, keeping their home very warm or using specialist medical equipment.

In a recent snapshot survey by the Charity, over 36,000 older campaigners said they were worried about the cost of living, and a third of those responded in more detail to express their concerns, their fears for the colder months ahead, and the stark reality of not having enough money to cover the basics. Extreme budgeting and having to make daily decisions about what to cut back on are undoubtedly taking their toll on people’s mental health, with many reporting feeling anxious and depressed.

Caroline Abrahams, Charity Director at Age UK said: “Talking to older people who rely on their State Pension certainly brings home just how serious the situation is for them. It comes to something when you hear a woman in her seventies describe how she is adopting strategies learned from her own parents’ experience during World War Two, to stay solvent in 2022.

“At Age UK we are detecting a real undercurrent of fear among some of our older population because they hear the talk about price rises accelerating later in the year and they know they’ve no chance of withstanding them, without more external help. If ever there was a time for Ministers to reassure older people that they are intervening to shield them from inflation, it’s now.

“Older people aren’t stupid and they realise that if they are struggling to keep their heads above water as things stand, the chances are they’ll slip under altogether in a few months’ time. This makes it a horrible time for them, as they see their modest expectation of living decently in retirement slipping out of reach, certainly temporarily, possibly forever.

“The Government must act quickly and decisively so pensioners on low and modest incomes can weather this storm.”