Dimming down in retirement: the impact of retirement on energy expenditure

We examine how the transition from work to retirement affects households' energy usage. Our findings show that the transition to retirement has a notable impact on energy expenditure levels, leading to approximately a one-quarter reduction, unlike most other expenditure categories. While this reduction in energy expenditure generally does not result in energy poverty, it does so in cases of involuntary retirement. Hence, our findings emphasize the need for targeted policies to support vulnerable groups, ensuring they maintain a decent standard of living in their retirement years. Our analyses also explore potential mediators: we observe a small increase in home renovations, which may partly account for the reduced energy expenditure through investments in energy-saving home improvements.