Seniors face more damage to incomes from higher energy costs this winter, a report says, but younger families are more at risk of not being able to pay their bills or falling into debt amid a cost-of-living crisis.
With families across Britain turning on heat, research by the Resolution Foundation Research Center finds that older generations, particularly those over 75, will spend a greater share of their income, from 5% to 8%, on their energy bills. . For those under 50, the rate is 5%.
But while older families face an even greater increase, it is the younger generations, who have endured years of stunted wage growth and higher rents, that will struggle the most, according to the report.
Even with government support – which includes energy price freezes, a £400 discount on bills and cut payments for vulnerable households – the typical household energy bill will be 83% higher this winter than it was before the cost of living crisis.
“All generations are struggling with the rising cost of living crisis – but different generations are experiencing it in very different ways,” said Molly Broome, an economist at Resolution.
Middle-aged people will experience the biggest rise in bills and older generations will see the greatest pressure on their incomes due to their larger and less energy efficient homes.
“But young people are more likely to struggle to pay the rising bills, because they are less likely to have savings — and so will either have to rely on older friends or family members, or may remain without heating during the upcoming cold weather.”
Younger families are four times more likely to have prepaid meters, which prevents them from being able to spread energy costs evenly throughout the year. Nearly a fifth of households headed by someone under 30 pay for gas and electricity this way, compared to about 5% of households headed by someone 65 or older.
While more than 80% of people over the age of 65 may dip money in their checking account or savings to cover unexpected expenses, less than half of people aged 20 to 29 can do the same.
Middle-aged households headed by someone aged 40-64 will see the biggest increase in the bill in cash, with typical annual energy bills rising by more than £1,000 over pre-crisis levels, to around £2,300. However, this reflects that these families tend to be larger.
With so many families struggling to make ends meet, the Living Wage Foundation campaign group has renewed its calls for companies to pay higher hourly wages. It is also waiting to see if the government will increase the statutory minimum wage, now £9.50 for adults aged 23 and over, in an autumn statement next week.
The voluntary living wage has been set at £10.90 across the UK and £11.95 in London. The organization said that giving low-wage workers an increase in aid It tackles poverty at work and also helps revitalize the struggling economy with £1.7 billion support.
“With the cost of living rising, it has never been more important for employers who can, increase pay and provide wages based on the cost of living,” said Catherine Chapman, director of the Living Wage Foundation.
“By doing so, they will not only provide security and stability for their workforce, but they will also boost the local economy.”