Another round of fuel price increases is scheduled for October, potentially causing annual household energy bills to exceed £2000. An additional 2.2 million households will fall into fuel poverty. The fuel poverty gap, which was £223 in 2020, is projected to expand significantly when the official figures for 2022 are eventually released. Here are some key terms:
To be plunged into the depths of fuel poverty, a perfect storm of factors must align:
At present, this is a common occurrence. According to the End Fuel Poverty Coalition, nearly half of low-income households still reside in energy inefficient homes. Furthermore, increases in fuel prices are expected to disproportionately affect those with low incomes, as fuel costs consume a significant portion of their disposable income.
Recent research conducted by the Joseph Rowntree Foundation reveals the following proportions of income allocated to energy bills:
Areas most affected by fuel poverty are by and large the old industrial regions, and other areas in need of “levelling up”, While the South East, the South West and to some extent East Anglia fare much better, with the exception of London:
% Neighbourhoods in Fuel Poverty
Yorkshire and Humber
East of England
% of Neighbourhoods in Fuel Poverty
Stoke on Trent
Barking and Dagenham
Yorks and Humber
East of England
East of England
Yorks and Humber
London stands out with three local authorities (LAs) ranking among the worst five. The West Midlands contributes to approximately one-third of the local authorities in the worst-performing category. Kings Lynn, despite being a rural area, appears in the table, which is surprising as the majority of these LAs are in city regions, which tend to house a significant portion of the communities labelled as "left behind" by the government.
Friends of the Earth have developed an exceptional interactive map that provides a comprehensive overview of fuel poverty patterns across England.
The link between low income and fuel poverty is evident, as low income constitutes a component of deprivation. Therefore, a strong correlation between fuel poverty and the index of multiple deprivation should logically exist. Surprisingly, there seems to be limited research conducted in this field, resulting in sparse evidence. A research paper published by the University of Sheffield in 2019 sheds some light on this relationship.
Through a series of correlation coefficients, the study discovers that the correlation between fuel poverty and multiple deprivation varies across the regions of England:
Clearly, there are other contributing factors at play. Drawing on government data, Friends of the Earth have produced a report that highlights the following findings:
The causes of fuel poverty are multifaceted. Drivers of fuel poverty exhibit regional variations as well as variations within regions. Low income is evidently a contributing factor, along with the imperative to manage or mitigate the impact of escalating energy prices. Increased attention must be directed toward addressing energy inefficiency. Notably, a significant portion of privately rented housing falls short of the required standards, emphasising the need to encourage private landlords to enhance the energy efficiency of their properties.
Instead, they are more likely to find themselves in privately rented accommodations, particularly in major cities such as London, due to the unaffordability of homeownership. This circumstance may help explain the high percentage of young people experiencing fuel poverty, attributable to the inadequate or fuel-inefficient properties they inhabit. Despite having relatively higher incomes, the burden of high rental costs offsets their financial resources.
The availability of social housing has also diminished substantially. Council housing, which constitutes publicly owned and managed housing by local authorities, reached its peak in the post-war era, accounting for 32% of the UK housing stock. However, by 2018, this percentage had plummeted to a mere 8%, reflecting a staggering loss of 4.5 million council homes since 1979. Low-income households find themselves compelled to seek privately rented accommodations, a significant portion of which, as previously discussed, lack energy efficiency.
Two potential solutions exist: the construction of additional social housing, though the likelihood of necessary policy changes remains unlikely, and the implementation of stringent measures to enhance the energy efficiency of privately rented accommodations.
Energy expenditure demonstrates less income variation compared to other spending categories, resulting in lower-income households allocating a larger portion of their family budgets to meet energy needs compared to higher-income groups. Any rise in energy prices will have a more pronounced effect on lower-income households. Recent and projected price escalations for 2022 indicate that the poorest 20% of households would need to allocate an additional £850-950 to maintain their energy consumption at the same level as in 2019-20.