Fuel poverty is an increasingly serious situation where a family or household on a low income live in a home that can’t be kept warm at a reasonable cost. The most recent government survey revealed that there was an estimated 2.55 million fuel poor households in England in 2016 – a 0.1% increase from the previous year.
What is fuel poverty?
Fuel poverty is defined by the government as a household whose fuel requirements are above the national average, and if they were to try to reach those requirements, their leftover income would sit them below the official poverty line.
The fuel poverty gap is also taken into account – this is the difference between the household’s average energy bill and what their bill would be in order for them to no longer be in fuel poverty. This allows the government to see how many houses are fuel poor, but also how fuel poor these houses actually are.
What causes fuel poverty?
Whether or not a household is classed as fuel poor depends on the following factors:
- Fuel prices: increases in energy costs are a big factor in the growing number of people classed as fuel poor. The average fuel costs for a fuel poor household are £1,366, compared to the national average of £1,177.
- Household income: lower income households are likely to spend a higher portion of their budget on fuel, and as a result, the leftover income is low enough to place the household below the poverty threshold. The average income of a fuel poor household is £10,325 - less than half of the average income in the UK.
- Energy efficiency: in houses that aren’t using energy efficiently, there’s a bigger chance that energy is being wasted. This means households are having to spend more to keep their homes warm.
Who’s affected by fuel poverty?
The FPEER (Fuel Poverty Energy Efficiency Rating) system measures the energy efficiency of a property while factoring in policies that affect energy prices directly. It initially gives a score out of 100, and then this is turned into a rating from A to G – G being the lowest and therefore least energy efficient.
It comes as no surprise then that over half of all fuel poor households are in Band D, while houses in Band G are three times more likely to be fuel poor than the average household in England - according to the most recent research conducted by the Department for Business, Energy & Industrial Strategy.
People in Band G are also the most impacted by fuel poverty, with their average fuel poverty gap coming in at around £1,482 – compared to an average fuel poverty gap of £185 for households in Band B.
Households with more than one person are also amongst the most severely affected with an average fuel poverty gap of £413, compared to households made of one person under 60 who have the smallest average fuel poverty gap of £208.
Nearly 10% of all fuel poor homes are also in unemployment, and where the reference person for a household is unemployed, that household is four times as likely to be fuel poor than the national average.
What help is available for fuel poor households?
If you’re struggling to keep up with your energy costs, you should remember that your energy provider won’t immediately cut off your supply. There are likely to be warning steps involved – for example, if you miss a bill payment, you’ll be sent a postal reminder after 14 days. This is generally followed by further correspondence and potentially even a home visit if the issue hasn’t been resolved.
That’s why it’s important to keep in contact with your supplier if you miss, or are in danger of missing a payment – they may be able to give you advice, or help you find a way to manage your payments. You might also benefit from one of the government’s schemes designed to assist people who struggle with their energy bills.
Winter fuel payments
You could get between £100 and £300 to help you with your energy bills through the winter fuel payments scheme if you were born before or on 5 November 1953. If you are eligible and you receive a social security benefit, such as a state pension, then you’ll usually get this as an automatic payment. Read our winter fuel payment guide for more information about what’s being offered and whether or not you qualify.
If you qualify for winter fuel payments, but you don’t receive them automatically, you will have to claim for them – be sure to check when the deadline is for next winter so you see you do receive your payments.
Cold weather payments
Cold weather payments are part of another government scheme that gives eligible people £25 for every period of seven days where the temperature reaches zero degrees Celsius or below. You might qualify for these payments if you receive:
- Income support
- Income-based jobseeker’s allowance
- Income-related employment and support allowance
- Universal credit
- Pension credit
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 to help you with your energy bill, giving you up to £140 as a one-time discount. The money isn’t paid to you directly – it’s taken off your electricity bill sometime between September and March instead.
You’ll either be eligible through the guaranteed credit element of Pension Credit, or you’ll qualify if you’re on a low income and you meet the standards set out by your supplier – if they’re involved in the scheme. Take a look at our warm home discount scheme guide to see what suppliers are taking part and what criteria you may have to meet.
Talk to your suppliers
You can always talk to your suppliers and ask them for advice on reducing your energy costs because energy companies are now being encouraged by the government to help their customers save money on fuel bills under the Energy Company Obligation (ECO).
What can you do at home to fight fuel poverty?
While there are government schemes that might be able to help with your fuel payments, there are things you can do at home to help cut energy costs. Some of the most common ways to cut your energy bill include:
- Watch your appliances: appliances left on standby still use up electricity, and turning them off at the plug could save you an average of £30 a year – going up to between £50 and £80 for households with more appliances and gadgets. It’s also worth checking if you can afford to upgrade any old appliances to newer, more efficient models, because you could end up using 40% less energy with an A+ efficiency rated oven compared to a B- rated oven.
- Change your energy habits: making small lifestyle changes can also help – washing up your dishes in a washing basin or bowl could save you £25 annually compared to letting the tap run. Even turning down the temperature of your washing machine by ten degrees could save you over £50 a year – though if you don’t use the right detergent for lower temperatures, you may have to re-wash your clothes, which can end up being more expensive.
- Upgrade your kit: your electrical appliances aren’t the only things that might need an upgrade. With a new A rated boiler and the right combination of accessories, including programmers and radiator controls, you could see annual savings in the hundreds. Getting a smart thermostat can give you greater control over your heating, which might mean you save some money too.
- Conserve your heat: not only do double glazed windows give you extra peace and quiet from the outdoors, they’re also better at keeping the heat inside – a detached home with all of its windows upgrading from single glazing to A rated double glazing could see savings of around £160 a year. Draught proofing your home can potentially save you £25 a year on heating bills, while insulating your roof or loft could cut annual costs by around £200. Installation can be an expensive process though, so you’ll have to decide if it’s really cost effective for you.
For more ways to cut the costs of your energy bills and help save the planet at the same time, have a look at our energy saving tips.
If you’re struggling to pay your energy bills, you may have the option of swapping over to a pre-payment meter. This lets you top up your home’s energy in a similar way to how pay-as-you-go phone plans work, so you pay for the energy you use, and you only use the energy you’ve already paid for.
The rates you might get on a prepayment meter can sometimes be more expensive than standard gas, electricity, or dual fuel tariffs though. Ofgem did apply a tighter price cap on prepayment meters in October 2017, but it’s still a good idea to compare quotes from different energy suppliers so you can find the best possible deal available to you.
Energy Saving Trust
The Energy Saving Trust can also help if you’re looking for free and impartial advice on how to cut your energy bills down and lower your emissions – you can call them on 0300 123 1234 at the national call rate.
Finding a better gas and electricity deal
Comparing gas and electricity providers can be a good way to save on your energy bills as you’ll be able to find better deals that are more suited to you – all you need to do is give a few details about your home and the people in it, your current tariff, and your rough energy usage habits.
You’ll then be able to compare energy tariffs based on the estimated monthly and yearly costs, whether it’s a fixed or variable rate, any early exit fees attached, and the yearly savings you could make. Once you’ve found the tariff you think is best for you, you’ll be on your way to finding a better deal for your gas and electricity.