From April a single person under 25 will get £265 a month universal credit. The standing charge for gas and elecricity on prepayment meters will total £26.50 a month. So from April a tenth of their UC will go on standing charges before they have used any fuel to keep warm.

— Paul Lewis (@paullewismoney) March 4, 2022

Fuel Poverty starts with a lack of income.

Inflation watch: you ain’t seen nothing yet. Welcome to the £80 a week heating bill that is more than half the state pension https://t.co/6QAVeKefXJ

— Paul Lewis (@paullewismoney) March 6, 2022

This is the State Pension that will only rise 3.1% next month offering pensioners scant protection against the cost of heating a state pensioner’s (or any vulnerable person’s) home.

Limitations on Universal Credit and on the State Pension mean that 2022 is going to be a tough year for the poor, especially those in older age who depend on the state.

One cost stands out – the cost of energy in our homes.

So how do Paul and the Times get to £4,200 pa?

This is my current bill, I’m paying about £190 pm or £2300 pa including my standing charge.

Industry experts predict that variable rate household prices for gas and electricity will rise to about £3,100 a year in October, if the regulator Ofgem allows this by raising the cap, which is already going up from £1,277 to £1,971 on April 1.

Energy companies are quoting around £4,200 a year for a fixed one-year deal for an average household — up from a typical £900 two years ago — as the Ukraine conflict forces the price of natural gas to new highs.

The Energy Shop, a comparison site, was advertising just a handful of fixed-rate deals yesterday. All were above £3,750 a year. A one-year deal with Scottish Power was quoted at £4,270.

Now add in just a few of the extra pressures on poor households

• Fuel prices rose to an average of 153p per litre for petrol and 157p for diesel.
• By August, the cost of bread could be 20 per cent higher than a year earlier
• For those with mortgages,  the base rate has increased in February from 0.25% to 0.5%, with the likelihood that at least two more increases will follow during 2022.
• For those in work, national insurance increases kick in in April
• The current inflation rate (January) is already 5.4%

Inflation hurts the poorest

The costs listed above are going to hit the poorest hardest, they have the same fixed costs (household heating, eating etc.) but no headroom in terms of net disposable income. Some of the discretionary spend can be cut, but not much. There are things we can all do to cut down on fuel bills

Welcome to the new reduced standard of living

If you are income poor, 2022 is going to be a time of hardship. It will be a year of no holidays, less shopping , less going out and it may be a year where people cannot afford their pensions.

Most people will pay their pensions through auto-enrolment anyway. But we need to make sure they pay no more than they need to (think about the net pay anomaly). We need to think about whether we can make certain people’s pensions non-contributory by using salary exchange to lessen the pain or by simply subsidising the employee contribution altogether.

Pension people cannot ignore the new standard of living, that is hitting the poorest hardest. We should be thinking of reward strategies that ensure that our long-term goals are not sacrificed to short-term considerations, which means focussing  on those on minimum wages and low incomes generally.

The new standard of living for those beyond work

But it is the pensioner and especially certain groups of pensioners, that we must be most worried about.  Pensioner poverty has been on the rise for some time

Pensioner poverty hits the oldest hardest

• People aged 85 and over have the highest rate of poverty among pensioners, at 22%. This has risen 6% since 2012.

It is regional

• Of all the regions in England, London is rising faster than any other and has by far the highest rate of pensioner poverty, at 25%. This has risen 7% since 2012 – 2014.
• The North West is also a cause for concern. It has risen 6% (from 12% to 18%) since 2012 –2014.  This has taken it from having one of the lowest rates of poverty to the joint second highest.
• The North East, which fell to a low of 10% in 2011 – 2013, has been steadily rising and has now gone up by 6% to 16%.

And it hurts the single pensioner worst

• For single female pensioners, poverty levels have risen from 17% in 2011 to 27% in 2020.
• For single male pensioners, levels have risen from 14% in 2011 to 23% in 2020.

We need to  help all the people “just getting by” , but the groups I’ve highlighted are the ones we must focus help on today,