The Government has been urged to rethink its plans to means test the winter fuel payment for pensioners after it emerged the energy price cap will rise in October.
Around 10 million pensioners are set to lose out on winter fuel payments as the new Government restricts the benefit to only those receiving pension credit.
The move was announced last month by Chancellor Rachel Reeves as part of a package of measures designed to tackle a £22 billion “black hole” in this year’s budget.
But following Ofgem’s announcement on Friday that the energy price cap would rise by 10% from October, charities and opposition parties have called for a U-turn.
Caroline Abrahams, charity director at Age UK, said restricting the winter fuel payment to those on pension credit was “reckless and wrong” and “spells disaster for pensioners on low and modest incomes”.
She said: “This latest bad news about the energy price cap rising quite significantly makes it even more obvious that means testing (winter fuel payments) with virtually no notice and with no protections to safeguard vulnerable groups was the wrong policy choice and one that is potentially hazardous for some older people.”
Both the Conservatives and the Greens have also called for winter fuel payments to be made available to all pensioners this winter following Ofgem’s announcement.
Shadow energy secretary Claire Coutinho said: “Because they weren’t honest about their plans, that means millions of pensioners will have made no plans to deal with higher energy bills this winter.”
Means testing the winter fuel payment is expected to save the Government £1.4 billion this year, which Labour said was necessary to make up the gap between the previous government’s spending plans and the money that was made available to fund them.
This price increase is the harvest of 14 years of Tory neglect and failure to prepare and invest in British-owned clean energy
Labour Party spokesperson
Labour has also criticised the previous government for failing to invest in energy efficiency and renewable power.
A party spokesperson said: “This price increase is the harvest of 14 years of Tory neglect and failure to prepare and invest in British-owned clean energy.
“While they were quick to blame everybody but themselves during the energy crisis, the Tories dragged their feet on energy security and took a hammer to the renewable energy sector, with working families still paying the price.”
The Government also insisted that more than one million pensioners would still receive the winter fuel payment and urged any pensioner worried about the impact of higher bills to check if they are eligible for pension credit.
Other charities and campaign groups have suggested different measures to mitigate the impact of rising energy bills, with Citizens Advice calling for “targeted bill support” and the End Fuel Poverty Coalition urging the expansion of other support funds and a reduction in standing charges.
The coalition’s Simon Francis also criticised Ofgem’s decision to increase the amount of profit energy suppliers could make by 11%, saying it added “insult to injury”.
He said: “Add to this that every month we hear about more massive profits for firms in the wider energy industry. It’s time to tax these firms fairly – not just the fossil fuel producers – and use the money to keep people warm now and in the long term.”
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