The poor and old will still pay too much

The poor, the old and the vulnerable should beware.  Good intentions could cost them dearly.  The government through the energy regulator is capping the price of gas and electricity paid for through prepayment meters.  They also want to solve the housing problem by “persuading” the elderly to leave their family homes and move to special retirement properties or warden-assisted flats.

Costs are more than better off customers pay

First of all Ofgem reckons that the 4million households with prepayment meters should save around £80 a year from April .   This long awaited measure recommended by the Competition and Markets Authority last year short changes those who have to pay upfront.   Last August it was calculated the poorest were paying £220 a year more than the cheapest deals on offer from the Big 6. These cheap fixes are often taken up by people with larger properties, who shop around to get the best deals.
Even now it will be difficult to compare the prepayment costs because the cap will not be a straightforward cap on the price per kwh as the companies say their costs vary.

The old will lose and property developers will gain

The idea that older people are the cause of the housing shortage because they retain their family home to welcome their children and grandchildren for high days and holidays is plain wrong.  Even if they all put their homes on the market they are unlikely to help those trying to get their first foot on the ladder.  But they will make big profits for builders and property developers, who are building lots of retirement properties.   These developments are leasehold and anyone considering moving needs to check the level of the service charges.   The annual increases are likely to make the NPower average increase of 9.8% from next month look modest.

The costs can rise ahead of inflation

Over the years I have dealt with many people whose service or management charges have risen well ahead of inflation and the constituent parts of the charges.  Then when they come to sell up they find that the second-hand value of their retirement homes are lower than they paid because most buyers want brand new, and the charges continue after they move out.  The developer will vet who can buy the property and  in addition there is often a final charge from the developer.
Much better to stay in the home and rent a room for up to £625 a month. This is totally tax-free and provides a home for someone outside of the commercial property market.