Energy price cap reductions began lowering domestic fuel budgets

The domestic fuel element of the Retirement Living Standards (RLS) budgets fell by more than a quarter for all household types after the energy price cap began to fall in July 2023, according to the 2024 update to the standards published by Pensions UK¹. The report, by researchers at the Centre for Research in Social Policy at Loughborough University, was published in June 2025¹.

The report attributes the change to the energy price cap, which limits the price per kilowatt hour and the standing charges paid by consumers. "This started to reduce in July 2023, with further reductions in most quarters since then until October 2024," it states¹. The 2024 fuel budgets are also below their 2022 level, the report says, and a further reduction in the price paid by consumers took effect in July 2025, which is not captured in the April 2024 figures¹.

The weekly domestic fuel budgets fell by the following amounts¹:

For a couple at the minimum standard, the fall in the fuel budget accounted for around 90% of the overall reduction in the total weekly budget¹. Overall, the amount single and partnered retirees would need to spend to reach the retirement living standards decreased at the minimum level, by 6.8% for a single person and by 3.2% for a couple¹.

The minimum retirement living standard was updated as part of ongoing Minimum Income Standard research, with minimum budgets rebased in 2024¹. The moderate and comfortable standards were mainly uprated using Consumer Prices Index changes for the year to April 2024, except domestic fuel, which was repriced using the Ofgem price per kilowatt hour for April to June 2024¹.

Why it matters for households

The RLS are benchmark budgets describing what the public agrees is needed to reach a minimum, moderate or comfortable standard of living in retirement¹. The fuel reductions feed directly into the minimum income figures used to describe what a retired single person or couple needs to spend each week, so the fall in the fuel element lowers the headline minimum budget at a time when other budget areas, such as food, rose¹.

The report notes that the weekly food budget at the minimum standard fell by around 8% for a single person between 2023 and 2024, partly because of uprating in a period of high inflation and partly because groups reduced the amount included for celebration food and drink in 2022 and 2024¹. For couple pensioners, the weekly food shop cost rose, and the amounts included for eating out and takeaways increased to £84 a month for the household, £4 more than in 2022¹. At the moderate and comfortable standards, the weekly food budget including eating out and takeaways rose by just under 4.5% between 2023 and 2024, more than the overall CPI rate of 2.3%¹.

The fuel figures are calculated for April 2024 and so do not reflect later changes in the cap¹. The report does not set out what the RLS budgets would be under subsequent cap levels.

What happens next

The report states that a further reduction in the price paid by consumers came into effect in July 2025, but that this is not captured in the 2024 fuel budgets, which are for April 2024¹. No date for the next update to the RLS has been reported¹.