Good week/bad week

Have this week’s events brought good news or bad for older people?

By Rebecca Law, Media and PR Officer

This has been a good week for Centrica’s shareholders, after the company’s dividend was increased by 12%. This follows the news of £1.3billion profits in the first half of the year for the energy giant which owns British Gas.

This may anger British Gas customers who will justifiably feel this has been a bad week since they face increases in their gas and electricity bills of 18% and 16% respectively from mid-August. The increases are particularly bad news for older people, the majority of whom live on fixed or declining incomes.

Centrica’s explanation for the price hikes is that, while the figures may look good, British Gas profits are in fact down 54% in the first half, so, as they claim, if they didn’t increase gas and electricity prices in the second half, their profit could be entirely wiped out, or they might even run at a loss. This will however be of little comfort to all those currently living in fuel poverty – and the increasing number who will be pushed into it as a result of the price hikes. It may be an over simplistic way of looking at it, but profits of £1.3billion can hardly be considered negligible, so British Gas shouldn’t expect sympathy from their customers any time soon.

The pain may however be muted, if only a little, by those with pension funds - many of which contain British Gas shares. Whether this small gain will compensate for the almost eye-watering increases in energy prices, however, is questionable.