Fuel poverty is a persistent and growing problem in the UK. Pre-pandemic, around 3.66 million households were classed as fuel poor, however the energy crisis is inevitably due to add millions more. Shockingly, it’s estimated 6.32 million households in Britain - that’s more than 15 million people - will be living in fuel poverty this year.
What is fuel poverty?
In basic terms, fuel poverty is when a household is unable to afford to heat their home to an adequate temperature. The definition is slightly different for England, Scotland, Wales, and Northern Ireland.
Fuel poverty in England is measured using the Low Income Low Energy Efficiency (LILEE) indicator, which considers a household to be fuel poor if:
- They are living in a property with a fuel poverty energy efficiency rating of band D or below
- AND when they spend the required amount to heat their home, they are left with a residual income below the official poverty line.
In Scotland the definition of a fuel poor household is:
- If, after housing costs have been deducted, more than 10% (20% for extreme fuel poverty) of their net income is required to pay for their reasonable fuel needs;
- AND if, after further adjustments are made to deduct childcare costs and any benefits received for a disability or care need, their remaining income is insufficient to maintain an acceptable standard of living, defined as being at least 90% of the UK Minimum Income Standard (MIS).
In Wales fuel poverty is defined as:
- Any household that would have to spend more than 10% of their income on maintaining a satisfactory heating regime.
- Any household having to spend more than 20% is defined as being in severe fuel poverty.
In Northern Ireland fuel poverty is defined as:
- Any household that needs to spend more than 10% of its income on energy costs.
Who are the fuel poor?
The Joseph Rowntree Foundation’s UK Poverty Report said, ‘Households who spend the highest proportion of their budgets on energy are likely to be the ones most affected by the rising energy cap, with already tight budgets further squeezed. Those particularly at risk are families with children, especially lone parents, and those in rented accommodation.’
With the latest price rises to kick in from April, the demographics of those falling into fuel poverty are bound to widen. Currently lone parents with dependents make up 18.9% of the fuel poor, with fuel poverty being highest in the private rented sector.
Going forwards, the elderly and disabled are likely to swell the ranks of the fuel poor post April 2022. Not only are they more likely to have older heating and hot water systems, and live in less energy efficient homes, but benefits and pensions will fail to keep up with the cost of energy. General cost of living rises and inflation will have already put the squeeze on limited incomes. The headlines saying households will have to choose between eating or heating this year will be true for far too many families.
What causes fuel poverty?
Estimates before the energy price cap increase in October 2021, put fuel poverty at around 13% of households in England, 25% in Scotland, 12% in Wales and 18% in Northern Ireland.
The three primary causes are:
- Low income
- High fuel prices
- Poor energy efficiency of homes.
The End Fuel Poverty Coalition adds unaffordable housing prices and poor quality private rental housing to that list. The organisation also points out that 96% of fuel poor homes are poorly insulated.
What are the effects of fuel poverty?
Fuel poverty has a direct link to health. Figures from the End Fuel Poverty Coalition state:
- C.11,400 winter deaths are caused by cold homes (NEA).
- Fuel poverty puts households more at risk from the worst effects of Covid-19.
- Public Health England (PHE) have declared that there is “clear evidence on the links between cold temperatures and respiratory problems.”
- Damp and mould are associated with a 30-50 per cent increase in respiratory problems (Ruse & Garlick, 2018).
- Ill health due to fuel poverty costs the NHS £3.6million every day.
- More people die from cold homes than do from alcohol, Parkinson’s Disease or traffic accidents.
- 3,200UK excess winter deaths are directly linked to the experience of fuel poverty.
- Fuel poverty also has an impact on those at school or work, leading to poor performance or excess days off.
How can we stop fuel poverty?
While there are some measures currently in place, such as a scheme in England to upgrade all fuel poor homes to an EPC Band C by 2030, sadly such schemes are now woefully inadequate in the face of the current crisis.
With the number of households in fuel poverty rising sharply, it’s clear we need to tackle the main causes of fuel poverty and fast. Measures need to include:
- Ensuring households pay a fair price for their gas and electricity.
- Stop unfair rates for the most vulnerable customers - currently those on pre-payment meters are more likely to pay increased charges for gas and electricity, making them more pre-disposed to fuel poverty.
- Currently rented accommodation should have minimum energy efficiency EPC band E. This should be increased to a minimum of Band D, with landlords encouraged to improve the insulation of homes to Band C and above, to help lower the tenant’s bills.
- The drive to increase the energy efficiency of homes needs to be significantly ramped up, with Government providing adequate funding. It’s estimated upgrading homes to at least band C could bring a 26% reduction on gas imports.
- The Fuel poor are not going to be able to afford to upgrade their heating and hot water systems. Targeted grants should be available to aid lower income homeowners to replace old and inefficient heating and hot water systems, or upgrade their current systems via controls, thermostat and Thermostatic Radiator Valves to make them more energy efficient.
What can you do if you can’t afford your bills?
If you are having issues paying your energy bills, please don’t ignore the problem. Talk to your supplier straight away, as they are well versed in the help schemes available.
You can also take steps to save money on your energy bills by making changes to how you use energy in your home.
Energy poverty links
If you want to find out more about fuel poverty, or view some of the information referenced in this blog please visit:
Fuel poverty statistics - Department for Business, Energy & Industrial Strategy
Citizens Advice - Grants and benefits to help you pay your energy bills
UK Poverty 2022: The essential guide to understanding poverty in the UK