Fuel poverty

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Fuel poverty is a serious and complicated issue, which energy suppliers are helping to tackle in a number of ways. In 2011-12, suppliers spent £237.5m on providing voluntary assistance to around 2 million customers in or at risk of fuel poverty. Most of this money was used to provide financial support to households struggling with their energy costs.

 

Between January 2013 and March 2015, suppliers also are expected to spend around 1.3 billion a year on energy efficiency measures via the Energy Company Obligation (ECO). A large part of this money will be made available to suppliers' most vulnerable customers, to help them reduce their bills, heat their homes and keep warm.


What is fuel poverty?


A fuel poor household is defined as one which needs to spend more than 10% of its income on all fuel use and to heat its home to an adequate standard of warmth. In England, this is defined as 21°C in the living room and 18°C in other occupied rooms. The current definition of fuel poverty states that it is driven by three key factors: energy efficiency of the home; energy costs and household income.


Since 2001, the Government has had a legal duty to set out policies that will, as far as possible, cut out fuel poverty. A variety of schemes and measures have been introduced, but the number of households assessed to be in fuel poverty has not fallen in line with the targets.


Tackling fuel poverty


Whilst tackling fuel poverty is a legal obligation of Government, energy suppliers recognise their responsibilities, especially the elderly, and those on key benefits.


With this in mind, suppliers have worked closely with social services, citizens’ advice bureaux and charitable groups, such as Age UK and Macmillan, to consider the best way to help vulnerable customers. Thousands of energy customers have been taken out of fuel poverty through the efforts of energy suppliers working with social welfare organisations.


Select Energy UK members also fund the Home Heat Helpline (0800 33 66 99), a free, not-for-profit phone line set up to help energy customers who are struggling to pay their fuel bills and keep warm. It was launched by the Energy Retail Association (now Energy UK) in October 2005 after research revealed that 75% of the most vulnerable customers were not aware of the assistance available from energy suppliers, and only a third would consider approaching their energy supplier. Since it began, the Home Heat Helpline has received over 250,000 calls from across Britain.


Challenges when dealing with fuel poverty


If fuel poverty is to be eased, hard choices need to be made and difficult problems solved. For example:

  • Providing financial assistance to those in or at risk of fuel poverty may help to provide a 'quick-fix’, but it does not solve the problem in the longer term.
  • Ofgem forecasts that the energy industry will need to invest up to £200 billion on our energy infrastructure in the next decade.

Energy UK believes that the fairest way of addressing fuel poverty, is through energy efficiency measures paid for from the tax and benefits system.


Energy UK is committed to working with Government to address these challenges, including the key question of how to identify the fuel poor.
 

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