This year, Fuel Poverty Awareness Day falls on Friday 2nd December. The day is promoted by National Energy Action and aims to raise awareness of the fuel poverty crisis and how an increasing number of households are in fuel poverty, with the number set to rise.
Households are classified as being in fuel poverty if they must spend 10% or more of their income on gas and electricity costs. It is estimated that more than ¾ of households in the UK – over 53 million people – will be in fuel poverty by January 2023. Additionally, fuel bills are expected to rise from an average of £3,549 to £4,200 per year, which is undoubtedly going to push more households over the fuel poverty line, and cause more financial stress to those already struggling.
There are three main factors that fuel poverty is driven by:
- Household Income
- Affordability of Energy
- Energy Efficiency of a Home
Your household’s income directly correlates to how likely you are to fall into fuel poverty. If you are spending more than 10% of your income on fuel costs and your remaining household income is insufficient, you will be unable to maintain an adequate standard of living.
Since 2008, the rate of inflation has grown faster than in previous decades, and there has been a steady decline in wages in recent years. The biggest cost increases have been to transport, household services, housing and food. Families are trying to cope with increased fuel prices whilst battling with the ‘heat or eat’ dilemma due to the increased cost of basics.
Households most at risk include:
- Single-parent households
- Disabled people
- The Elderly
Affordability of Energy
Energy is becoming less affordable for households. Fuel prices are continuing to climb, and even with the fuel cap that has been put into place, it is not enough.
Wages are increasing at a much slower rate than inflation. Inflation is having a negative effect on wages, and it means that those with lower-paid jobs are struggling to keep afloat. In May 2022, the Government announced a package of support to address the increasing energy prices with five main strands:
- £400 to all households, labelled as an ‘energy discount’ that will be subtracted from energy bills.
- £150 for all households in council tax bands A–D (representing around 80% of households).
- £650 for any family on means-tested benefits.
- £300 for pensioners.
- £150 for those in receipt of a disability benefit
Despite this help being offered, with how quickly fuel prices and inflation are going up, this support is not enough to cover it, nor does it effectively target those living in low-income households.
Energy Efficiency of a Home
Older homes tend to be much less energy-efficient than newer homes due to general wear and tear, old boiler systems and insufficient insulation. This means that they cost a lot more to heat and it can also be more difficult to heat them too, especially for those on low incomes.
To improve energy efficiency, older homes will often require retrofitting with double-glazed windows and insulation in the roof, which can be expensive.
One major way to help with energy costs is to use central heating effectively. Changing the settings on your boiler could reduce the amount of energy used to heat your home. Nesta’s Money Saving Boiler Challenge encourages households to lower the flow temperature on their condensing combi boilers to 60°C. By doing so, the average household could save around £112 per year.
You could be eligible for a boiler upgrade. Through the Government’s Boiler Upgrade Scheme, you could get a grant to cover part of the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler.
Health Impacts of Fuel Poverty
Cold, damp homes because of fuel poverty can lead to a variety of physical and mental illnesses and exacerbate existing illnesses such as respiratory and circulatory problems. Healthcare leaders warn that rising rates of fuel poverty will be a public health emergency, further straining already stretched health and care services. The NHS in England spends £1.3 billion each year treating preventable conditions caused by cold, damp homes.
1 in 5 households with children is experiencing fuel poverty. There are several implications to this, including the fact children cannot concentrate on homework or are able to get a good night’s sleep because they are cold and hungry. This impacts their ability to learn and retain information, having a negative effect on their education.
Adults and older adults have a higher risk of respiratory and circulatory problems if they are living in colder conditions due to fuel poverty. Furthermore, cold homes have been associated with lower strength and dexterity, and an increase in symptoms of arthritis, which can increase the risk of falls and unintentional injury in the elderly.
Help available for coping with rising energy bills
Along with the Government package of support announced in May 2022, there are other benefits you may be entitled to if you are on a low income:
- Warm Home Discount – You could get £150 off your electricity bill for winter 2022 to 2023.
- Winter Fuel Payment – People born or before 25th September 1956 can get between £250 – £600 to help with paying heating bills.
- Cold Weather Payment – You can receive a weekly payment of £25 towards heating your home if the weather forecast is 0°C or below for 7 consecutive days between 1st November 2022 – 23rd March 2023.
How Central Liverpool Credit Union can help
The government payments will not be enough to cover high fuel costs, nor do they target low-income families/households. Thankfully, there is help and advice available for coping with rising energy costs.
CLCU are here to help for advice and support, but if you need help or a low-interest loan instead of going to a bank, CLCU can help.
Find out more about our loans and services to see how we can help you.