Fuel poverty affects one in five households

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More than a fifth of all households in the UK were affected by fuel poverty in 2009, government figures have shown.

Higher fuel bills meant the number of homes affected rose by one million, or 22%, to 5.5 million, the Department of Energy and Climate Change said.

A household is described as being in fuel poverty when it has to spend more than 10% of its income keeping warm.

DECC predicts that the numbers for 2010 and 2011 will have increased because of further rises in the price of energy.

"Between 2004 and 2009, energy prices increased: domestic electricity prices increased by over 75%, while gas prices increased by over 122% over the same period," DECC said.

"This led to the rise in fuel poverty seen over this period," it added.

The Climate Change Minister, Greg Barker, admitted the figures were unacceptable.

He blamed past Labour policies and the state of the UK's housing.

"The fact is that homes in the UK are amongst the most expensive to heat in Europe yet we don't have the most expensive gas and energy prices," he told BBC Radio 4's You and Yours programme.

"Next year [we start] the most ambitious home improvement since the second world war, where we're not just putting a bit of lagging in people's lofts, but [will] transform on a whole house basis, millions of homes over next decade."

Rising prices

Before 2004, the problem had been in decline, with fuel poverty across the UK dropping from 6.5 million homes in 1996 to just under 2 million in 2003.

Start Quote

The overall effect of price rises since 2004 has far outweighed the impact of increasing incomes and energy efficiency”

End Quote DECC

This had been driven by the combined effect of rising incomes and falling energy prices.

Despite increased effort and money being put into insulating homes to make them more energy efficient, DECC admitted that the benefit of these initiatives was being swamped by steeply rising fuel prices.

"The overall effect of price rises since 2004 has far outweighed the impact of increasing incomes and energy efficiency," DECC said.

Recently, both British Gas and Scottish Power have announced further price rises and other energy suppliers are expected to follow them soon.

As a result, DECC warned that an increasing number of households were now at risk of falling into fuel poverty.

Audrey Gallacher from Consumer Focus says there needs to be more competition for the big six providers.

It estimates that in England another 100,000 households will have been pushed below the threshold, taking the number to 4.1 million by the end of this year, out of a total of 21.5 million homes.

But the official consumer body, Consumer Focus, said this was likely to be an underestimate.

"Four of the Big Six have yet to announce their expected price rises," said Audrey Gallacher at Consumer Focus.

"If these are in line with the increases announced from British Gas and Scottish Power around 12 million people, or 6.4 million British households, are likely to be in fuel poverty when the latest price rises hit."

'Scandalous'

Most of the fuel-poor homes are "vulnerable", defined by the government as ones containing the elderly, children, or someone who is disabled or suffering from a long-term illness.

In England for instance, this broad category covers the majority (71%) of homes.

Michelle Mitchell, charity director at Age UK, said the increasing problem of fuel poverty was "scandalous".

"Almost half of people living in fuel poverty are aged over 60," she said.

"Help for fuel poor households through the Warm Front scheme is being phased out and the promised solutions contained in Green Deal don't come into force until late 2012 - too late for the millions of people struggling to heat their homes this winter."

Derek Lickorish, chair of the government's own fuel poverty advisory group said: "Despite such welcome initiatives as the Warm Homes Discount and the potential for the Green Deal, the scale of the fuel poverty challenge dwarfs the assistance that is likely to be available."

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