The Daily Telegraph

Truss’s action plugs state pension black hole

- By Jessica Beard

THE energy price freeze will now prevent half of the state pension from being swallowed by household bills.

Pensioners will now spend 20pc of the benefit on energy bills next year, down from a predicted 58pc after Liz Truss’s interventi­on to shelter homes from the worst of the price crisis.

Following the action, a typical household will not spend more than £2,500 on energy bills for the next two years, falling to £2,100 as a result of the £400 energy discount.

Under previous forecasts, pensioners would have had to spend almost two thirds of the state-paid benefit on energy bills. Cornwall Insight, the energy consultant, predicted just weeks ago that the cap would surge to £5,387 in January before increasing again in April to £6,616.

The state pension rises under the “triple lock” each year, ensuring payments increase by the highest of inflation, wage growth or 2.5pc. As a result, the full new state pension is expected to rise to £10,600 next April, with the average paying out at £9,623 a year. There had been fears that up to three quarters of this would have to go towards power bills.

Yet the crisis will still wipe out a larger share than in previous years, taking up 22pc of the full state pension this year. That is compared to 14pc last winter, when the price cap stood at £1,277.

Caroline Abrahams, of Age UK, warned that the freeze would not go far enough for those who depend entirely on the state pension.

Newspapers in English

Newspapers from United Kingdom