Pensioners face a tough winter ahead following the Labour Government’s decision to effectively scrap the Winter Fuel Payment for millions of households.
Experts are sharing how older people can prepare for the eventual hike to energy bills in light of this support being withdrawn from many individuals.
Last month, Chancellor Rachel Reeves confirmed the Winter Fuel Payment would be means-tested starting from this year; instead of being universal.
With this announcement, pensioners will now need to be in receipt of means-tested benefit payments from the Department for Work and Pensions (DWP) to claim.
On top of this, the UK’s energy regulator Ofgem confirmed the price cap would be raised by 10 per cent from October, raising bills for the typical household.
Speaking exclusively to GB News, EQ Investors’ Zoe Brett broke down what pensioners should be doing to mitigate the impact of rising energy bills this winter.
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Pensioners can get the Winter Fuel Payment to help them with heating bills during the winter – but now it will be means-tested
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Make a budget and stick to it
According to Brett, budgeting is key to navigating any financial predicament and will be vital in assisting older people with their finances this winter.
“The rise in energy bills shows that the cost-of-living crisis continues but there is finally hope of some light at the end of the tunnel with inflation and interest rates coming down.
“That said, many economic challenges remain that will pull on the purse strings of our finances over the next six to twelve months. Building a good budget and sticking to it can ease some of the burden.
If you know what you have coming in and allocate it wisely, you’ll not just be ahead of the game in your financial planning but will also have the mental clarity of either knowing you don’t need to worry or at least knowing it’s time to put a plan in place to correct things before they become troublesome.”
Bolster your emergency savings
Furthermore, the financial planner recommended a rainy day fund to help older households offset any likely hikes to energy bills in the coming months.
“Once your budget is set, it’s time to protect yourself from future pitfalls that can disrupt the best laid plans.
“Financial emergencies are an inevitable part of life, but they need not be a burden on your expenses if you are already prepared for them.
“It is widely accepted that a person should have between three and six months of expenditure put aside to cover unforeseen costs like job loss or significant home repairs.”
Protect your wealth from inflation
Despite the latest consumer price index (CPI) rate easing to 2.2 per cent, experts are urging Britons to prepare for potentially dramatic rises in inflation over the next couple of years.
While the UK has enjoyed high interest rates, which have been passed onto savings accounts, this has been diminished by inflation reaching heights of 11.1 per cent during the pandemic.
Ofgem is raising the energy price cap in a blow to millions of households
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Brett suggests a useful investing technique to making sure peoples’ money goes further despite inflation remaining an issue.
“Beyond this emergency cash buffer and any cash, you may need for the next five years, it is prudent to protect your wealth from long term inflation erosion.
“History shows us that the best way to do this is to invest surplus cash reserves.
“Markets will fluctuate in the short term but over the long-term equities trend upward and have been shown time and time again to beat inflation and protect your money from erosion.”
