Fuel poverty

Thanks to soaring energy prices and inefficient homes, millions of people are struggling to pay their bills. That's why United for Warm Homes is campaigning to end fuel poverty. Find out more about fuel poverty, its impacts and what the government should do to eradicate it.

12 Sep 2022

Fuel poverty is used to describe people who can't afford their energy bills, but the exact definition varies.

In England, the government defines fuel poverty as:

households left with less than £1,495 disposable income each month after paying gas and electricity bills* and
living in a home with a low energy efficiency rating (and therefore more expensive to heat).

* 60% of median disposable income in 2022

But more recently, the Welsh government and fuel poverty groups have started using a different and simpler metric: you're in fuel poverty if you need to spend more than 10% of your income on energy. This is the definition we use to calculate our figures.

Rising energy bills

Our rising energy bills first hit major headlines in February 2022, when the energy regulator Ofgem announced a big increase in the energy price cap. Further increases throughout 2022 prompted the government to introduce some measures to help those struggling, including:

additional welfare payments
temporary removal of green levies from bills
£400 energy bill rebate for every home
a decision to freeze the price cap at £2,500 (or £1,950 when the rebate and green levy removal are factored in).

The most recent measure of freezing the price cap means far fewer people will be in fuel poverty than previously expected. But that doesn't change the fact that energy bills will still be much higher than normal for many people in 2023 – typical energy bills in recent years have been around £1,150.

It's still likely that up to 6 million households across the UK will be in fuel poverty in 2023.

Why has fuel poverty increased?

There are several reasons why fuel poverty increased so rapidly in 2022:

The cost of energy keeps increasing due to soaring gas prices, so we need to spend more of our income to heat our homes.
The energy efficiency of homes in the UK is poor, with too many of us living in draughty homes.
Lots of us can’t afford the basic energy saving measures that would bring our bills down permanently.
The general cost of living is rising, putting pressure on our finances.

Senior woman feeling her radiator and reading her gas bill — Woman by radiator reading her gas bill © Marina113 via Getty Images

Fuel poverty and health

No matter who you are, if you live in a cold home, your health and wellbeing are at risk. It can make pre-existing conditions worse, lead to new health conditions and even cause premature death. Some health problems associated with living in a cold home include:

a higher chance of getting a respiratory infection and bronchitis
stress on the cardiovascular system
making asthma symptoms worse, or causing asthma to develop
an increased risk of mental health problems.

Who's impacted by fuel poverty?

Fuel poverty is high everywhere, but some parts of the country are worse affected than others.

Enter your postcode or zoom into the map and then tap on your area to reveal energy crisis hotspots near you. Energy crisis hotspots are areas where incomes are less than average but energy bills are higher than average (because of poor energy efficiency).

What’s more, statistics show that people on a low income, people of colour, young people and disabled people are disproportionately affected by fuel poverty:

People of colour are twice as likely to live in fuel poor neighbourhoods as white people.
Neighbourhoods with a high proportion of disabled people and/or with health challenges tend to have a high proportion of households in fuel poverty. The "Out in the Cold" report by Scope stated more than 900,000 households with a disabled person in England are in fuel poverty.
25% of households where the oldest member is aged 16 to 24 years were fuel poor, compared to 11% for 60–74-year-olds.

What are the solutions?

We all deserve to be warm in our own home, but right now millions of people are facing a very tough winter. Worryingly, gas prices are predicted to stay high for at least 3 years, yet some of the government's financial support is for 1 year only, which means people will likely struggle for some time.

While global gas prices are driven by factors outside of our control, the government does have ways it can solve the energy price crisis – but it needs to act now.

We’re calling for the government to:

provide urgent support to people dealing with sky-high energy bills
fund a new emergency programme to insulate our homes and
ensure our energy system is powered by cheap, green renewables.

The government needs to act now to lower energy bills this winter and eradicate fuel poverty once and for all.

Which is where you and your group come in. Over the next 2 years, United for Warm Homes will focus on galvanising public support for better government action on fuel poverty. If you haven’t done so already, sign your group up to join the campaign.

FAQs

There’s no easy answer because it depends on the size, age and current condition of each home, as well as the level of retrofit aimed for. But it can be anywhere from a few hundred to many thousands of pounds. Either way, most people don’t have the money right now to pay for the works that would bring down their bills permanently. That’s why United for Warm Homes is calling on the government to fund a new national programme of basic insulation measures – starting with those hit hardest by high energy costs.

If you’re able to afford it and are thinking about insulating your own home, the Energy Saving Trust has useful content and price estimates for different measures and different home types.

We don’t have a precise cost for a national programme of insulation covering basic measures such as loft and cavity wall insulation. This is because there are a lot of variables and slightly different approaches will be needed in each of the UK’s 4 nations. However, we estimate the cost for England and Wales to be around £15 billion for low-income energy crisis hotspots, which would be spread over the time period needed to roll it out.

Right now, many people don’t have the upfront cash to pay for measures that’ll likely save them money over the next few years. We’re therefore calling for this programme of basic measures to be paid for by the government in low-income areas, but channelled through councils. We’re also suggesting avoiding means testing for the programme as this’ll just add extra bureaucracy and slow things down, and may also discourage some low-income homes from participating.

It depends on the measures installed and the cost of energy. But even basic measures can save people significant money. Loft or cavity wall insulation, for example, will each save a household around 20% on its bills and pay for themselves in a few years.

Currently it costs £450 more per year to heat a home rated Energy Performance Certificate (EPC) D than a home rated EPC C, and £1,350 more for a home rated EPC E. Bringing all homes up to EPC C standard in England would save householders £10.2 billion in energy costs each year.

With energy costs currently so high, even expensive measures such as installing solar panels may pay themselves back within a handful of years. The Energy Saving Trust has useful content and price estimates for different measures, including estimated cost savings.

Renewable energy is the cheapest way to produce electricity, at the current price of gas as much as 9 times cheaper. We should be moving as fast as we can to cheaper and cleaner renewables, and away from expensive, polluting fossil fuels. This’ll help bring down electricity bills, but of course this only helps with heating costs if you have electric heating.

There are also some changes to the energy market that the government needs to make to ensure these cheaper prices feed through to consumers. The energy regulator Ofgem is currently looking at possible changes.

Until these changes are made, electric heating is still more expensive, except for heat pumps which are ultra efficient. Heat pumps will therefore need to become the norm, and this’ll bring down emissions too. Check out Friends of the Earth’s advice on eco heating.

Renewables and eco heating are a big part of the answer to our failed energy system, but they’ll take time to scale up. In the meantime, it’s vital that everyone has a warm home and an energy bill they can afford. That’s why United for Warm Homes is also campaigning for financial support for those struggling, as well as insulation to make homes warmer and cheaper to heat.