Ofgem price cap hike prompts renewed calls to change winter fuel payments

The Government has been urged to rethink plans for a means-tested winter fuel payment for pensioners after it emerged that the energy price cap will rise in October.

Some 10 million pensioners will lose their right to receive winter fuel allowances as the new government restricts the benefit to pension recipients.

The decision was announced last month by Chancellor of the Exchequer Rachel Reeves and is part of a package of measures to tackle a £22 billion spending 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 called for a change of stance.

Caroline Abrahams, director of the Age UK charity, said restricting winter fuel payments to Pension Credit claimants was “irresponsible and wrong” and “would spell disaster for pensioners on low and modest incomes”.

She said: “The latest bad news about a significant increase in the energy price cap makes it even clearer that testing the means (of winter fuel payments) with virtually no notice and without any safeguards to protect vulnerable groups was a flawed policy choice that could potentially be dangerous for some older people.”

Both the Conservatives and the Greens have also called for winter fuel allowances to be made available to all pensioners in response to Ofgem’s announcement.

Shadow energy secretary Claire Coutinho said: “Because they have not been honest about their plans, it has meant that millions of pensioners have failed to take action to address higher energy bills this winter.”

Testing winter fuel payments is expected to save the Government £1.4 billion this year, which Labour says is necessary to plug the gap between the previous government’s spending plans and the money allocated to fund them.

This price rise is the result of 14 years of Tory neglect and a lack of preparedness and investment in clean British energy.

Labour also criticised the previous government for its lack of investment in energy efficiency and renewable energy.

A party spokesman said: “These price increases are the result of 14 years of Tory neglect and a lack of preparedness and investment in British clean energy.

“During the energy crisis, conservatives were quick to blame everyone but themselves, but they dragged their feet on energy security and hit the renewable energy sector, and working families are paying the price.”

The Government has also assured that more than a million pensioners will continue to receive their Winter Fuel Allowance and urged any pensioners concerned about the impact of higher bills to check if they qualify for Pension Credit.

Other charities and campaign groups have proposed various measures to ease the impact of rising energy bills, with Citizens Advice calling for “targeted bill support” and the End Fuel Poverty Coalition calling for the expansion of other support funds and a reduction in fixed charges.

Simon Francis of the Coalition also criticised Ofgem’s decision to increase the profit energy suppliers can make by 11%, calling it an “insult to a grievance”.

He said: “Add to that the fact that every month we hear about the increasing profits of companies in the wider energy sector. It is time to tax these companies fairly – not just the producers of fossil fuels – and use the money to keep people warm now and in the long term.”