Suffolk and Essex: Pensions fail to keep up with price rises

THE extent to which the cost of living has soared in the last five years – particularly for those on fixed incomes – can be revealed by the EADT today.

While the basic pension paid by the Government has increased by 16% since 2006, it has been completely outpaced by the cost of household utilities in Suffolk and Essex.

Household bills for gas, electric, water and council tax in Suffolk are now, on average, a total of �850 more per year compared to five years ago – and that’s before increased costs in fuel and food are taken into account. In Essex, the increase is around �820.

This is largely because of major increases in gas and electricity bills, which have gone up on average by 75% and 53% respectively since January 2006.

The average price rises were calculated by energy comparison website uSwitch.

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The average rise in council tax bills across Suffolk and the average rise in Anglian Water bills has remained in line with the pension rise – which is determined by the annual price inflation rate.

However, the rise in utility costs is a source of concern for Age UK Suffolk because these are bills that cannot be avoided and hit those on a fixed income particularly hard.

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Daphne Savage, from Age UK Suffolk, said: “These kind of bills are something that can hit those on pensions especially hard because they are not something you can avoid.

“Retired people often end up spending more on utilities because they are at home more than those who go out to work – they end up using energy throughout the day.”

She said that in rural areas the cost of heating oil was also a serious concern – and that had increased significantly over recent months.

She said: “I don’t think you can over-estimate how important these kind of bills are for retired people. Those of us who go to work every day turn the heating off when we’re not at home but if you are retired you can’t do that when the weather is really cold.”

Betty Constable, of Colchester Pensioners’ Action Group, added: “You can either go without food or heating but you know how much a pension is and you can work out – without being a mathematician – that it does not go very far.

“I don’t think the country can go along like this.

“Heating is one of the things that’s gone up but so has food – I’m dumbfounded over the price of it.

“If you don’t own your own house and you’re paying a rent that uses up your pension. Rents of properties have soared up so much that anyone on a state pension could not afford it.”

In the early years of the decade there were some steep rises in council tax bills, but over the last few years these increases have been linked closely with the inflation rate.

Restrictions by water regulator Ofwat have ensured that Anglian Water bills have not risen dramatically either.

Andy Robinson, from uSwitch, said: “To see the real impact of energy price hikes you have to look at the collective picture – and it isn’t pretty.

“The latest increase has hit 24.6 million customers, added over �560million onto our energy bills and taken the average household energy bill to �1,250.

“It is a painful reminder that while households are attempting to rein in costs their essential bills are being pushed up, often through no fault of their own.”

The major increases in energy charges came in 2006 and 2008 and while there have been slight falls since there, recently energy costs started rising again.

EDF Energy is one of the largest energy suppliers – and currently has some of the lowest tariffs, although the relative positions of the companies can change regularly.

A spokeswoman for the company said: “EDF Energy has pledged to keep standard gas and electricity prices for residential customers at their current levels this winter, until at least the start of March 2011. Energy consumption is typically at its highest in winter with average gas use in the coldest months of December and January more than six times higher than in July and August.

“Last winter we also launched our annual Safe, Warm & Well campaign in partnership with the charity WRVS.

“This winter’s campaign offered vulnerable and elderly customers tips and advice on how to stay warm during the colder months and save money on their energy bills.

“Our Energy Assist tariff offers vulnerable customers our lowest standard tariff rates with a further �37.50 discount (plus VAT) on bills per fuel per year. It is available to customers who are in receipt of income support, pension credit or are considered fuel poor.”

A spokesman for the Department of Work and Pensions said pension increases were calculated according to a “triple pledge.”

He said: “Pensions increase by the Retail Price Index, the Consumer Price Index, or 2.5% whichever is the highest.”

He added that other factors, apart from utility and council tax bills, had to be considered when the pension rate was calculated.

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