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Extra 300,000 in fuel poverty after price rises

The number of households in fuel poverty is ‘spiralling’ according the Fuel Poverty Advisory Group.

Wrapped upThe Group warns that price rises of 7% on average,  which fully take effect in the next few weeks, will force up to 300,000 households into fuel poverty (when a home spends 10% or more of its income on heating).

The warning echoes recent research by uSwitch which found that the price hikes – which will take the average household energy bill to £1,334 – will take the total number of households in fuel poverty up to 7.2 million.

With changes to energy policy on the horizon, The Fuel Poverty Advisory Group (FPAG) is calling on the government to create a cross-departmental body to oversea new policies and give local authorities fuel poverty targets.

The news follows recent reports that the government is looking into changing the definition of fuel poverty to include a measure of how badly people are affected.

Fuel poverty ‘set to sky rocket’

“With a cold winter, welfare reforms cutting incomes, and all at a time of austerity measures and other rising household costs, the plight of the fuel poor has never been more serious,” said Derek Lickorish, chairman of the FPAG.

“Millions are living in misery due to high energy bills. Yet time is running out for the government to fuel poverty-proof the homes of those on the lowest incomes.

“A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky rocket without radical action.”

Ann Robinson, Director of Consumer Policy for uSwitch, said that households increasingly felt pushed to ‘drastic’ action to manage their energy costs: “Today’s report from the Fuel Poverty Advisory Group reveals the true extent of the problem of energy affordability and the number of households who will fall into fuel poverty.

“Although those in fuel poverty are undoubtedly in the worse predicament, the harsh reality is that rising energy bills are affecting the majority of households, with many being forced to take drastic steps to cut bills which are putting their health and well-being at risk.

“Our research reveals that almost nine in ten households (89%) plan to ration their energy use this winter to save on bills and last winter over half of all households (55%) went without heating at some point to keep their energy costs down.

She also said that the government needed to do more to tackle fuel poverty, with ‘urgent action’ needed this winter:

“Making homes more energy efficient is part of the answer and consumers can reduce their bills substantially by shopping around. There is more than £300 difference between the cheapest and the most expensive deals on the market, but in addition the government could make a huge difference by adding a supplement to means tested benefits to ensure that consumers most in need can keep warm this winter.”

What can you do?

Smaller suppliers – With around £300 difference between the cheapest and most expensive tariffs on the market households are being urged to compare tariffs and suppliers, but what’s on offer? There are a number of smaller suppliers available including Co-Op Energy, who recently announced a 2% price cut.

Fixed plans? – Those tempted to switch but worried about future price rises could also opt for fixed price tariffs. While they may pay more initially some fixed plans currently available last more than two years.

Insulate – Insulation is one of the most cost-effective ways to save on energy bills and increasingly affordable due to government subsidies.

Fuel poverty – A regional issue?

The following infographic from 2011 shows the huge regional variation in fuel poverty, with areas like Wales and the East far more susceptible than London and the Midlands: