What is fuel poverty?

End Fuel PovertyAs we prepare to launch our own research and campaign looking at fuel poverty, we invited the End Fuel Poverty Coalition to introduce the topic with some facts and figures.

Fuel poverty is where a household cannot heat their home to a comfortable level at a reasonable cost. In the UK, fuel poverty was previously defined by the Warm Homes and Energy Conservation Act 2000 like this:

A person is to be regarded as living in fuel poverty if he is a member of a household living on a lower income in a home which cannot be kept warm at reasonable cost.

However, the Coalition Government carried out a review and adopted a more complicated measure of fuel poverty, defined like this:

A household is deemed to be fuelpoor if their income is below the poverty line (taking into account their energy costs); and their energy costs are higher than is typical for their household type.”

Additionally, a Fuel Poverty Indicator has been created, which shows how far into fuel poverty households are, not simply if they are in poverty or not (i.e. the difference between a household’s bill and what it would need for them to no longer be fuel-poor).

What are the causes of fuel poverty?

Fuel poverty is primarily caused by a convergence of four factors:

  • Low income, which is often linked to absolute poverty
  • High fuel prices, including the use of relatively expensive fuel sources (such as electricity in the UK, aggravated by higher tariffs for low-volume energy users)
  • Poor energy efficiency of a home, e.g. through low levels of insulation and old or inefficient heating systems
  • Under-occupancy: according to UK government statistics, on average those in the most extreme fuel poverty live in larger than average homes

Who is affected by fuel poverty?

Fuel poverty can have serious implications on the health and wellbeing of vulnerable groups such as the elderly, children and people living with disabilities or chronic illness.  The vast majority of households in fuel poverty are owner-occupied properties.

These groups are particularly vulnerable to the effects of fuel poverty for a variety of reasons, including that they are likely to be at home for more of the day and are more vulnerable to the health impacts of cold homes, such as respiratory illnesses.

How many people are in fuel poverty?

Whilst statistics cannot illustrate the current extent of individual suffering, the Department for Energy and Climate Change estimate that in 2011 (using the older definition of fuel poverty), the number of fuel-poor households was around 4.5 million, representing around 17% of all UK households. 3.2 million of those were in England.

Under the Coalition government’s revised definition of fuel poverty, there are still 2.3 -2.8 million fuel-poor households in England in 2013.

What are the effects of fuel poverty?

Tackling fuel poverty not only improves people’s quality of life, but it also prevents health problems.

This in turn reduces the wider costs on health and social services, as it is well known that inadequate heating can both create health problems and make them worse. A cold home increases the likelihood of ill health, can aggravate illnesses such as influenza, heart disease, strokes and respiratory illnesses, and is also linked to domestic accidents.

Currently, it is estimated that treating the symptoms of fuel poverty and living in cold homes costs the NHS £1.3 billion per year.

There is also a clear link between fuel poverty and excess winter deaths, which are reaching near-crisis levels.

According to recent figures compiled by the Office for National Statistics, there were an estimated 31,000 excess winter deaths in England and Wales in 2012-13, an increase of nearly one third on the previous winter.

Excess winter death information is collected nationally by the Office for National Statistics (ONS), an independent body that collects data on the economy, population and society at a national and local level. Information on excess winter deaths is important in:

  • tackling certain premature deaths;
  • supporting energy-efficient interventions in housing;
  • encouraging fuel poverty referral.

As yet, no figures are available on the causes of excess deaths last winter, which was characterised by a milder than average December followed by a prolonged period of lower than average temperatures. However, it is widely acknowledged that the majority of excess winter deaths are caused by:

  • diseases of the cardiovascular system, such as stroke and heart attack
  • respiratory diseases, in particular the flu.

Alongside the health impacts, fuel poverty can also have wider social effects and increase social isolation. Older people may be fearful of going out because they will come back to a cold home, and they can also be reluctant to invite friends and relatives into a cold environment. Families with children may congregate in one room that is heated, and this makes it difficult for children to do homework, play or have friends round to visit.

Supporting households in fuel poverty

Fuel-poor households can be supported with policies that reduce energy cost (which include policies that increase energy efficiency, encourage switching to better energy tariffs and/or directly support household energy costs) and through policies that increase incomes.

The recent Hills Review suggested that – based purely on a consideration of subsidy cost – those policies that improve the energy efficiency of dwellings tend to be more cost-effective for addressing fuel poverty compared to policies that are focused on subsidising energy costs or increasing incomes.

In particular, there are significant cost-effective measures that can be taken, for example by installing low-cost loft and cavity-wall insulation (CWI) and heating measures.

End Fuel PovertyThe End Fuel Poverty Coalition has over 50 members including poverty, environmental, health, trade union and consumer organisations, as well as Church Action on Poverty, all campaigning for energy-efficient homes and low-cost fuel for low-income households.The EFPC campaigns to support the over 3.2 million people that are currently living in fuel poverty in the UK.

Food, Fuel, FinanceChurch Action on Poverty is campaigning for people on low incomes to pay Fair Prices for energy, as part of our ‘Food, Fuel, Finance‘ project.

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