Fuel poverty, plus inflation. This year has been a disastrous year for everyone, but, even more so for those under financial stress. Here, we take a deep-dive in to the numbers, and identify who's been left in the cold.
Fuel poverty is estimated to impact over 3 million people in the UK and unfortunately, is on the rise.
Its consequences are not just discomfort, but for many can be quite literally deadly.
The definition of fuel poverty is when a household’s required fuel costs are above the median level and if they were to make the payments, it would leave their residual income below what is considered the poverty line.
The causes of fuel poverty include low income, increasing energy prices and poorly insulated homes.
Fuel poverty tends to predominantly affect low income households, with the least energy efficient properties who pay the most for their energy.
Due to temperatures plummeting, fuel poverty increases during the winter months. This has been further intensified by the COVID-19 pandemic, which has forced those in fuel poverty to stay in their homes that they cannot afford to heat.
Unsurprisingly, some of the most deprived areas in the UK suffer from the worst rates of fuel poverty. So, which locations have the most households that are fuel poor? We analysed the latest data to find out.
Areas with the worst fuel poverty in the UK
The region with the worst rates of fuel poverty is Scotland, with 25% of households in fuel poverty.
Following Scotland is Northern Ireland at 18% and North West England at 12.1%.
With some of the highest rates of poverty and households in rural locations, it is unsurprising that these regions of the UK are those where people are struggling with the costs of keeping their homes warm.
Beyond regions, in terms of local authorities, some of the highest rates of fuel poverty were found to be in Blackpool (15.2%), Newham (16.1%) and the Isles of Scilly (20.9%).
What about those with the least amount of fuel poverty?
Surrey Heath (5.6%) and North Tyneside (7.6%) were two areas with some of the lowest rates of fuel poor households.
Fuel poverty by UK region (infographic)
Image released under Creative Commons. If used, please attribute it by linking to: heatable.co.uk
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Just how many households are in fuel poverty?
According to the Government’s annual data review, in 2018, 2.4 million households were in fuel poverty.
The House of Commons estimates indicate that the average fuel poverty gap in 2018 was £334, an increase on 2017's average of £328.
Estimates also reveal that around 10% of households in England are facing fuel poverty, compared to 24% in Scotland, 12% in Wales and 18% in Northern Ireland.
Estimates also reveal that around 10% of households in England are facing fuel poverty
However, these figures reflect the situation before the Covid-19 pandemic, which itself has caused significant economic turmoil, including job losses, leading to financial difficulties for many households.
How is fuel poverty calculated?
The exact way fuel poverty is measured varies across the UK, but the most widely used formula is in England, which is calculated using the Low-Income High Costs (LIHC) indicator.
Under the LIHC indicator, a household is considered to be in fuel poverty, if the following are applicable:
They have required fuel costs that are above the national median level
If they were to spend that amount, it would leave their residual income below what is considered the poverty line
Using this information, the government is able to determine how negatively impacted each household is and can go on to determine a household’s fuel poverty gap.
This is the amount the household will need to earn in order not to be classified as fuel-poor.
The government considers the interaction of three important factors when determining whether a household is fuel-poor:
Household income
Household energy requirements
Fuel prices
Fuel poverty in numbers - the harsh reality
In 2018/2019 the Office of National Statistics (ONS) estimated that 23,300 excess winter deaths occurred in England and Wales and National Energy Action estimates that around 12,000 annual deaths occur as a result of health conditions that arise or worsen due to living in a cold property.
According to ONS, those most at risk of winter mortality are females over the age of 90, with respiratory illness being the predominant cause of death in 2018/2019.
Energy Help Guides:
But, who else is at risk?
As well as the elderly, young families are also at risk.
In fact, according to a study conducted by Economy Energy, 1 in 4 of those living in cold homes are young families with dependants.
As well as being at increased risk of certain respiratory health conditions such as asthma and bronchitis, children’s well-being and school performance are negatively affected by living in a cold home.
People who live off-grid, utilise electrical heating and have a specific need e.g. a health condition are at particular risk from fuel poverty.
The National Institute of Care Excellence (NICE) has a list of groups it considers most at risk from living in damp, cold living conditions, these include the following:
Individuals with respiratory conditions
Individuals with cardiovascular problems
Individuals with disabilities
Individuals over the age of 65
Young children
Pregnant women
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There are free boiler grants still available for households in receipt of certain benefits that live within the UK.
This funding is made available by the big six energy companies in support of assisting vulnerable households to make the transition to new efficient boilers.
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How can fuel poverty be tackled?
Fuel poverty can be tackled by addressing any of the factors that contribute to a household becoming fuel-poor i.e. low income, energy requirements and fuel prices.
Since low household income is a major cause of fuel poverty, the National Energy Action is calling for the welfare system to be redesigned to help release individuals from the prison of poverty.
The Government also offer the Winter Fuel Payment, a grant to help those eligible pay for their heating bills when demand increases. However, MPs have called for this scheme to be extended to prevent a fuel poverty catastrophe.
From December of this year, energy companies are now obliged to help prepayment customers struggling to make payments, which is certainly good news for those on the breadline.
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Energy switching services are a great way for households to ensure they are supplying their homes with the cheapest energy possible.
Yet, pensioners continue to face barriers when it comes to navigating the online landscape.
Home energy requirements are another key area of focus, with energy loss due to poor-quality buildings being a key target.
Instead of concentrating on the consequences of poor-quality homes, financial assistance can also be provided to help low-income households improve the energy efficiency of their homes.
For example, roof and wall insulation and double glazing make homes more thermally efficient and reduce energy loss.
In the short term, it is clear that financial assistance needs to be provided to help societies' most vulnerable.
Yet, long term, a focus on improving long-quality housing in terms of energy efficiency is essential.
Poverty itself also needs to be addressed by society as a whole, which is why it is crucial to maintain pressure on MPs to ensure it receives the attention it needs.
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