Getting to grips with high energy bills
If you're struggling to pay your energy bills this winter, there are ways to improve your situation
Key takeaways
Factors contributing to fuel poverty include high fuel prices, low household income, and poor energy efficiency
Those affected are typically low-income or unemployed individuals, but rising costs are also impacting middle-income households
Signs of fuel poverty include not using heating during cold spells and ignoring bills
Assistance is available through government schemes, such as Winter Fuel Payments, Cold Weather Payments, and the Warm Home Discount scheme
How many people are living in fuel poverty?
Energy prices are down from record peaks of a few years ago. But with the average energy bill still much higher than it was before the energy crisis, the issue of fuel poverty remains a huge problem.
According to government figures, in 2023, there were an estimated 13.0 per cent of households (3.17 million) in fuel poverty in England. That was broadly unchanged from 2022 when the figure was 13.1 per cent.
The outlook for 2024 is slightly better, with fuel poverty due to decrease to 12.7 per cent (3.12 million).
However, for households still affected, the financial strain of these bills is felt acutely. Especially by those already managing tight budgets.
What's more, it's claimed that the government's figures could, in fact, drastically underestimate the scale of the problem of Fuel Poverty.
The charity National Energy Action warns that the actual number could be much higher, potentially affecting up to 6.5 million households as of February 2024.
This discrepancy suggests that the official measure may not fully capture the extent of the issue, particularly for low-income households that maintain high energy efficiency yet still struggle financially.
The surge in energy prices since 2021 has disproportionately impacted the poorest households, leaving them most vulnerable to the economic pressures of fuel poverty.
What is fuel poverty?
A household is considered fuel poor if it is required to spend above-average energy costs that, once paid, would push its income below the poverty line.
The threshold for this is typically if a household dedicates at least 10% of its income to fuel costs. This definition helps to identify those most at risk and in need of support.
How is fuel poverty calculated?
The assessment of fuel poverty is conducted using the Low Income Low Energy Efficiency (LILEE) metric.
This method has faced criticism for potentially not capturing the full scope of the problem, suggesting that further refinement may be necessary to ensure all affected households are identified and can receive appropriate support.
What are the causes of fuel poverty?
Fuel poverty is influenced by a combination of factors:
Fuel prices: The cost of energy has seen dramatic increases since 2021. That's despite regulatory efforts to shield households from the worst of this, such as the Energy Bills Discount Scheme
Household income: Lower-income households naturally spend a larger portion of their budget on fuel
Energy efficiency: Homes that are not energy-efficient incur higher costs due to wasted energy
Unemployment, low incomes, and residing in properties with poor energy efficiency are common characteristics of those affected by fuel poverty.
However, it's not just the lowest-income families feeling the pinch; middle-income families are also under pressure due to the rising costs.
Pensioners are also expected to struggle with bills this year, as a result of the introduction of Winter Fuel Payment means-testing.
Previously a universal benefit for pensioners, the Winter Fuel Payment is now solely available if you're in receipt of Pension Credit or other qualifying benefits. Some claim this will push pensioners into Fuel Poverty
What are the signs of fuel poverty?
Recognising the signs of fuel poverty is crucial for getting help. These signs may include:
Avoiding the use of heating to save money
Wearing extra layers of clothing indoors
Delaying or neglecting to pay energy bills
Experiencing stress or anxiety over the cost of energy
If you find yourself struggling to pay energy bills, it's important to reach out to your energy supplier. Energy providers are required to offer a grace period and send reminders before disconnecting supply due to missed payments.
Engaging in dialogue with your supplier can lead to payment management assistance and the possibility of accessing government support schemes.
What help is available for fuel poor households?
Winter Fuel Payments
To be eligible in England and Wales, you must be of state pension age and receiving Pension Credit or other qualifying benefits. And have an income of less than £218.15 per week for individuals and £332.95 for couples
Cold Weather Payments
During periods of freezing temperatures, the cold weather payments scheme provides £25 for every seven-day period to eligible recipients. Find out more about eligibility and what you receive with our guide to Cold Weather Payments.
Warm Home Discount scheme
The Warm Home Discount scheme offers a one-off discount of up to £150 on electricity bills to eligible individuals during the colder months.
Talk to your suppliers
Energy suppliers can provide advice on reducing costs under the Energy Company Obligation (ECO). It's always worth discussing your situation with them to explore all available options.
What can you do at home to fight fuel poverty?
There are practical steps homeowners can take to mitigate energy costs, such as switching off appliances when not in use, washing clothes at cooler temperatures, and insulating their homes to keep out drafts. You'll find some handy tips in our guide to keeping your energy bills down.
You might also want to...
Consider a prepayment meter
For those who have difficulty managing energy bills, prepayment meters offer a way to pay for energy as it is used. This can be an effective way to manage energy consumption and costs.
Seek out a better gas and electricity deal
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