Pensioners are disproportionately impacted by higher energy costs, and many low-income pensioner households do not claim the means-tested benefits they are entitled to.
People are eligible for this payment if they are over the State Pension age (aged 66 or above) between 19 – 25 September 2022.
The State Pension age has increased from 65 to 66 meaning that men and women born between 6 October 1954 and 5 April 1960 will start receiving their state pension on their 66th birthday. Current legislation sets out for the State Pension age to rise to age 67 between 2026-28 and to age 68 between 2044-46.
The Government is committed in legislation to undertake a review of the State Pension age every six years to consider a variety of factors including the latest life expectancy projections. The first Review of the State Pension age was undertaken in 2017 and concluded that the next Review should consider whether the increase to age 68 should be brought forward to 2037-39 before tabling any changes to legislation. This latest Review must be published by 7 May 2023.
There is also cost-of-living support for those who have not reached the State Pension age.
Under the Energy Price Guarantee (EPG), the typical household will pay no more than £2,500 on their energy bill until April 2023. Thereafter, the price cap will rise so that the typical household will pay no more than £3,000 until April 2024. The EPG will save the average household a further £500 and mean they will not have to face energy bills of £6,000 this winter or next.
In addition to the EPG, I strongly welcome the Chancellor’s allocation of a further £12 billion for the Government’s cost-of-living support package, taking the total from £37 to £49 billion.
This increase means that, in addition to the Cost-of-Living Payments that started being made in 2022, the Government will provide extra one-off payments of £900 for the eight million households on means-tested benefits, a second £300 Pensioner Cost-of-Living Payment, and another £150 for disability benefit recipients in 2023/24. The Chancellor also announced that the Government will provide £1 billion of extra funding by extending the Household Support Fund to March 2024, bringing the total of the Fund to £2.5 billion.
Moreover, both the State Pension and benefits, including Pension Credit, will increase by 10.1 per cent for 2023/24, in line with inflation. This represents the biggest increase in the State Pension ever.