Older people are expected to spend a higher share of their income on energy bills this winter, compared to other age groups, as the cost of living bites.
According to the Resolution Foundation’s Intergenerational Audit report, those over 75 are expected to spend 8% of their total household income on bills, even with significant government support.
This is partly because people in this age group are more likely to live in energy-intensive homes.
Only a third of households led by someone aged 65 and over live in homes with an energy-efficient AC EPC rating, compared to half of households led by someone aged 16 to 29. Older people also tend to live in larger, harder-to-heat homes, he said.
The data, which is funded by the ESRC Connecting Generations research programme, looked at the cost of living crisis facing Britons today – from rising energy bills this winter to mortgage costs, in through falling house prices and rising unemployment next year.
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Resolution Foundation added that all generations will be forced to spend more on their energy bills this year, but young households are most at risk of not being able to pay them or falling behind.
Younger households are up to four times more likely to use prepayment meters, which prevents them from evenly spreading energy costs throughout the year.
The audit found that 19% of households headed by someone aged 16-29 are on a prepayment meter for their electricity and 18% are on a prepayment meter for their gas, compared to 5% and 4% of households run by a 65 year old. and above.
Young people are also less likely to have assets and savings to draw on to meet rising energy costs.
While more than four-fifths of people aged 65-74 and 75+ say they could use money from their checking account or tap into existing savings to cover an unexpected expense. Just under half of 20-29 year olds are in the same situation.
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Even with government support, from lump sum payments for vulnerable households to the £400 energy bill rebate and energy price guarantee, the energy bill for a typical household will be 83% higher in 2022-23 compared to pre-energy crisis levels.
Middle-aged households – those headed by people aged 40-49 and 50-64 – will see the biggest increases in cash flow, with typical annual energy bills for these groups increasing by more than 1,000 £ on pre-crisis levels, at around £2,260 and £2,320 respectively, in 2022-23.
However, this largely reflects the fact that these households tend to be larger than older or younger households.
The Resolution Foundation found that while non-retirees are £816 a year worse off on average due to changes to working age benefits since 2010, pensioners are £666 a year better off due to the triple lockdown.
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Molly Broome, economist at the Resolution Foundation, said: “All generations are facing hardship from the growing cost of living crisis – but different generations are experiencing it very differently.
“Middle-aged people will face the biggest bill increases and older generations will see the biggest squeeze on their incomes due to their larger, less energy-efficient homes.
“But it is young people who are most likely to struggle to pay rising bills, as they are less likely to have savings to fall back on – and will therefore be forced to rely on friends or members of older family, or potentially going without heating during the coming cold weather.