National Energy Action (NEA) is the leading charity working across England, Wales and Northern Ireland to help households that are in fuel poverty. This is a complex issue that is influenced by various factors and affects millions in the UK, leading to cold, unsafe homes, as well as rising debt.
What is fuel poverty?
We should all be able to stay warm at home. However, rising energy costs, low incomes and energy-inefficient homes are restricting people’s options, leaving them in impossible situations like having to choose to heat their home, feed their children or pay their rent.
As a result, around four million UK households are in the grip of fuel poverty, unable to afford to heat their homes to the temperature needed to keep warm and healthy. It’s a national injustice that sees those with the least money having no choice but to live in homes that are the most difficult and expensive to heat.
The government uses the Low Income Low Energy Efficiency (LILEE) definition for fuel poverty in England (Scotland, Wales and Northern Ireland use different definitions). Under the LILEE indicator, a household is considered to be fuel poor if:
- they are living in a property with a fuel poverty energy efficiency rating of band D or below
- and when they spend the required amount to heat their home, they are left with a residual income below the official poverty line
There are three important elements in determining whether a household is fuel poor:
- household income
- household energy requirements – energy efficiency is a key driver of fuel poverty, as higher energy efficiency reduces a household’s fuel costs for a particular size of property
- fuel prices – the energy price cap, which keeps suppliers from setting their default tariff higher than a set amount, is largely determined by wholesale energy prices
The fuel poverty gap is the additional income that would be needed to bring a household to the point of not being fuel poor.
Prolonged periods when households struggle to pay their bills can lead to increasing and unsustainable levels of debt for households, resulting in a vicious cycle that can be difficult to escape from. It can also lead to unsafe energy rationing, where households try to use as little energy as possible, and even voluntary self disconnection by those with prepayment meters in a bid to spend less.
Cold homes can cause or worsen a range of serious health conditions such as heart attacks, strokes, bronchitis, and asthma. Each year, around 10,000 people die as a result of living in a cold home. Fuel poverty can also have a significant impact on mental health and is a known risk factor for suicide.
Public Health England (PHE) has warned there is a damaging overlap between the health impacts of living in a cold home and Covid-19. Pre-existing chronic medical conditions such as cardiovascular and respiratory conditions, such as chronic obstructive pulmonary disease (COPD), asthma and heart disease are particularly badly affected by a cold home.
Cold homes are also preventing children from thriving. Without a warm, quiet place to do their homework, they can fall behind at school. A lack of hot water means they might avoid personal care, leading to bullying and social isolation. With no warm space to spend time with their family they can spend hours of the day alone in bed. Some resort to using public places like libraries or friends’ houses to stay warm in. All this is disruptive and damaging a time crucial for their development.
The collective impact on the UK is significant too. £1.3bn is spent each year on health services in England on treating illness caused by cold homes, and 20% of the UK’s carbon emissions come from housing. If households were sufficiently supported to retrofit their homes, then both fuel poverty and the UK’s impact on climate change would be lessened.
Fuel poverty is not inevitable. The same systems that created the problem can be reshaped to build a society where everyone gets to live in a warm home. The UK has a legally binding target to tackle fuel poverty. In 2014, the government put in place a new statutory fuel poverty target for England. To ensure that as many fuel poor households as reasonably practicable achieve a minimum energy efficiency rating of band C by 2030, with interim targets of band E by 2020, and band D by 2025.
Providing financial support to help struggling households improve the heating and insulation of their properties would make their homes easier and cheaper to heat, as well as reduce carbon emissions.
Vulnerable people can be supported to navigate the complexities of the energy market, and additional protections can be put in place to make sure they aren’t unfairly disadvantaged by policies and practices.
And welfare systems can be redesigned to help release more people from the grip of poverty.
NEA works to raise awareness of fuel poverty through campaigning and policy advocacy. We also provide advice to fuel poor and vulnerable households to help them save money and access vital benefits and rebates.