The Budget: Rise in fuel bills is a blow

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The Independent Online

Pensioners, aged 81 and 77

East London

THE PROSPECT of higher fuel bills was a big blow for Harry and Gladys Kay. Like many elderly people, keeping warm in winter is a top priority, writes Esther Oxford.

'The VAT on fuel and power is our biggest worry. The Chancellor's decision is going to be life-threatening. Pensioners are already too scared to turn their heating on full. They die of hyperthermia every winter,' Mr Kay said.

The couple pay pounds 38 a week in rent and estimate that they spend pounds 12 a week on heating and lighting. Income comes from a state pension and pounds 40 from an occupational pension from their jobs as trade union officials in the clothing industry.

'While Norman Lamont welcomed the recent fall in interest rates, it has a bitter edge for those with savings. The young are the only ones who might benefit from the Budget. Many of them - like our grandchildren - have mortgages to pay. But for old people who rely on interest from their savings it is a struggle,' Mr Kay said.

'My wife and I worked hard to save our pounds 25,000. Three or four years ago when interest rates were 14 per cent we used to make pounds 5,000 from the interest on our savings. We would use it as holiday money. Nowadays we make pounds 500. Instead of taking three weeks we take two weeks. Instead of going to Cuba we go to Spain.'

The couple believe they are fortunate because they have 'above average' pensions but fear that the state pension could become means-tested.

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