Millions of elderly poor left out of pocket after Whitehall blunder on energy bill advice

MILLIONS of pensioners face being left £420 worse off because of government advice to switch utility providers in the middle of an energy bills crisis.

The Department for Work and Pensions sent 10 million letters to poor pensioners about the winter fuel allowance, saying switching energy firms could save them money on their bills – something that in fact would leave them hundreds of pounds out of pocket.

Until recently, switching to a fixedrate deal would have made financial sense. But today, moving from the average standard variable tariff to the cheapest fixed-rate deal would cost bill payers £420 a year, according to Uswitch, a comparison service. Switching from a variable tariff to the average fixed deal would mean paying £650 a year more.

Traditional advice about saving on heating and electricity costs has reversed following a crisis in the supply of gas across Europe which has caused prices to reach record highs and dozens of suppliers to collapse.

The costliest fixed-rate deal is now more than £1,000 a year more expensive than a standard variable-rate deal, which is limited to £1,277 a year by the energy price cap that protects consumers.

Despite this, pensioners who received the letters were encouraged to switch and look online for a new deal. A message on the envelope suggested that they could save as much as £290.

Martin Lewis of Money Saving Expert, who first spotted the blunder, said the erroneous message was “damaging” and “simply wrong”.

“We are in an extreme energy bill crisis. There has never been a time when clarity of message and action is more important. Mailing out an incorrect message to millions of people, including many of the nation’s most vulnerable, is too big a risk to take,” he said.

Sources at the DWP confirmed that millions had been sent the letters. They said the envelopes that included the out-of-date advice had been ordered in early summer before the gas bills crisis had fully evolved and it was not feasible “to just bin them all”.

Mr Lewis added: “Of course, no one wants to see paper wasted. These envelopes could be held for the future, when hopefully things get back to normal.”