The cost of domestic energy has worried many pensioners

Middle earning pensioners cut back on energy use the most as prices increased in recent years, research suggests.

This group reduced their energy use by 12% when prices leapt between 2004 and 2007, according to the Institute for Fiscal Studies (IFS).

The wide-ranging report found that overall household spending reached a peak when people were in their late 50s before falling rapidly.

The report said the young were more likely to be paying for new technology.

Energy bills

The research found that older households saw domestic bills increase by 55% for gas and 36% for electricity over the two-year period.

It is important to remember that reductions in fuel consumption do not necessarily imply large negative effects on individual living standards IFS report Help with battling bills

This meant that on average households spent between around 21% or 22% more on energy, while cutting their fuel consumption by 10%.

Middle earners cut consumption (by 12%) at a higher rate than the poorest (down 7%) and the richest (down 8%).

Charity Age Concern and Help the Aged, which funded the research, claimed that this added weight to their existing view that some older people were turning down their heating to save on fuel bills.

But the IFS report did not attempt to draw any firm conclusions on how this reduction in energy use came about.

The report said that, while some did not fully heat their homes, others had probably switched off their lights and heating when they left the house.

"It is important to remember that reductions in fuel consumption do not necessarily imply large negative effects on individual living standards," the report said.

However, it did reveal that the proportion of household income spent on fuel bills was far higher among the poorest fifth of pensioner couples - spending 8.8% of their income - than the richest fifth who spent 2.6% on energy bills. For pensioners living on their own, this proportion was at 10.6% among the poorest fifth.

Any household that spends more than 10% of income on energy is defined as being in fuel poverty. The government set a target to eradicate fuel poverty in England by 2016.

Garry Felgate, chief executive of the Energy Retail Association, which represents the energy companies, said: "The IFS report highlights some important concerns. Energy companies offer a range of help to customers struggling with their energy bills so that no one goes cold in winter."

Lifestyle

The report revealed a range of ways in which older people spent their money.

They included:

• Pensioners spent less, on average, than non-pensioners but between 2001 and 2007 older people's spending has risen more rapidly
• Poverty rates measured by spending have fallen in recent years for pensioners, down 19% between 1998 and 2007 - the first sustained fall for some time
• Retired people only spent more than non-pensioners on food in the home, household fuel and healthcare
• Spending by older people on leisure, healthcare and private transport grew the most.

Other findings showed that spending on communications rose by 28% among pensioners, lagging behind a 70% leap by others. This suggested that mobile phones and internet subscriptions were more popular among the young.

There was a noticeable rich/poor divide when it came to pensioners paying for holidays. The richest fifth spent 12.5% if their non-housing budget on holidays compared with 3.3% of the budget among the poorest fifth.

"What is most clear from this important new research is the significant differences in living standards between older people at different ends of the income scale," said Andrew Harrop, of Age Concern and Help the Aged.

A separate report by energy regulator Ofgem found that the number of people cut off from their energy supply because they did not pay their bills fell sharply in 2008.

The number of domestic disconnections in the UK fell by 30% from 8,384 in 2007 to 5,890 the following year.

"In these tough economic times it is more important than ever that energy suppliers do all they can to help customers who are struggling to pay their bills," said Maxine Frerk, of Ofgem.