Some three million families are living in fuel poverty, according to government estimates - but charities warn the true number could be double that after the price cap increases in April. The latest government figures reveal that 3.16 million households in England were living in fuel poverty in 2020 - down from 3.18 million in 2019.
Based on these figures, they estimate that the figure has continued to fall, to 30.06 million in 2021 and 3.03 million in 2022 - which is still 12.5 per cent of the population. They say the projected drop is mainly due to continued progress in energy efficiency, but the rate of decrease has slowed as a result of changes in incomes due to the impact of the pandemic and rising fuel prices.
This is also reflected in a predicted rise in the average fuel poverty gap - the reduction in fuel costs needed for a household to not be in fuel poverty. This is projected to be £258 in 2022, up by 15% in real terms compared to 2020 (£223).
However, these estimates are based on projecting forward from two years of survey data and so the year on year trend does not present the full impact of changes affecting single years. For example, in 2022/23 prices are expected to rise by 54 per cent but only half of this impact will be seen in the estimates for 2022.
National Energy Action (NEA), which monitors fuel poverty, argue that these figures are a huge underestimate of the true number of people struggling to pay for fuel. The government defines fuel poverty as households living in a home with low energy efficiency - below band C - who, were they to spend the required amount on fuel costs, would be left with an income below the official poverty line.
However, that official poverty line is a relative benchmark, which is based on everyone’s disposable incomes. If higher energy prices are hitting everyone, then the poverty line may not move, even if they result in many more people struggling.
In comparison, Scotland, Wales and Northern Ireland use a different definition of fuel poverty to England - a household is fuel poor if they spend more than 10% of income (after housing costs) on energy. By this definition NEA estimates that the number of fuel poor households in England is set to rise significantly, from 4.5 million now to 6.5 million after the April price rise.
Ofgem has announced that the energy price cap, which limits how much providers are allowed to charge, will rise by 54 per cent from £1,277 a year to £1,971. It means that average costs of heating will increase by £693 in April 2022 in England, Wales and Scotland.
Peter Smith, director of policy and advocacy at NEA, said: “The government’s statistics do not capture the recently announced huge hikes in energy bills. NEA estimates that the true number of households in fuel poverty across the UK will increase to 6.5 million households in total in April, an increase of more than 50% in just over six months.
“Despite a long lag in the Government data for England, these new statistics do shine a light on a hugely alarming lack of progress to meet the UK Government’s statutory fuel poverty commitments. By 2030 there should be no fuel poor households living in energy inefficient homes. But, based on current progress, instead of eight years, it will take over 60 years for that to happen.
“The Government also had a clear goal to improve the least efficient homes by 2020, but over 180,000 of the poorest households in England are languishing in the most expensive to heat homes. Energy bills could soon reach up to £2,000 per year for the ‘average household’ but for those living in the least efficient homes the hikes will be much higher, possibly up to £3,000, if they were to heat their homes to a healthy or reasonable level.
“The energy crisis should be a wake-up call to do far more to protect these households, but key programmes are missing in action. These statistics highlight why we haven’t got any time to waste.”
A government spokesperson said: “The best long-term method to keep household energy costs down is through improving the energy efficiency of our homes and buildings so we use less expensive gas, which is why we are investing over £6.6bn over this Parliament to these ends. We are also providing support worth £21billion this financial year and next to ease short-term pressures and help working families, low-income households and the most vulnerable with energy bills."
