Fuel poverty - What is it?

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Last updated: 29 March 2021

Have you ever felt that you are always cold in your own home? Are your bills so unaffordable that you prioritise saving money over comfort or warmth? Then it may be possible that you are living in ‘fuel poverty’.

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What is fuel poverty?

The phrase ‘fuel poverty’ carries an eerie tone and is actually much more common, and easy to fall into, than most would expect. But what exactly is fuel poverty? The government considers fuel poverty to be when a household’s income falls below the official poverty line as a result of trying to meet fuel requirements that are above the national average.

There is also a ‘fuel poverty gap’ measurement which allows the government to calculate just how ‘fuel poor’ households experiencing fuel poverty are. This figure it obtained by calculating the difference between the household’s average energy bill and how much they would need to be spending on fuel in order to no longer fall into the fuel poverty bracket.

Statistics from 2016 show that the figure for households living in fuel poverty was 11.1%. This may not seem like a lot at face value, but it equates to approximately 2.55 million households across the UK.

How do people find themselves in fuel poverty?

There are three main factors affecting whether a household experiences fuel poverty or not - the cost of fuel, the household income, and how energy efficient the house is.

The rising cost of energy is considered to be the biggest factor in throwing more households into fuel poverty. Households experiencing fuel poverty spend almost £200 more every year on fuel compared to the national average. Fuel poor households spend around £1,366 per year, with the national average being just £1,177.

Naturally, lower income households are going to find it harder to pay the bills than those with higher levels of disposable income. A much higher proportion of their budget will go towards fuel costs, and the remaining income is sometimes so low that it pushes the household below the poverty line. Households experiencing fuel poverty earn less than half of the average UK household income, at just £10,325 a year.

Houses built with insufficient insulation and energy-saving measures are unsurprisingly energy-inefficient. Much more energy is used in order to maintain warmth in these homes due to energy wastage, and of course, much more money is being spent in order to do so.

What can you do to escape fuel poverty?

The good news for those experiencing fuel poverty is that there is help out there.

Warm home discount scheme

There are government schemes such as the Warm Home Discount scheme which can give you up to £140 towards your fuel bills if you’re eligible.

Winter fuel payments scheme

The Winter Fuel payments scheme offers between £100 to £300 to some of those born before 5 November 1953.

Cold weather payments

Cold weather payments is another scheme for households in fuel poverty. Under it, eligible households are entitled to £25 per every seven days the temperature drops to or below 0 degrees Celsius. You may be eligible for this scheme is you are on income support, universal credit, or pension credit.

Speak to your supplier

If you are struggling to pay your bills, it is always worth speaking with your energy supplier. They will usually offer advice on the best ways you can reduce your energy costs.

Make some changes around the home

There are also a few changes you can make yourself in order to alleviate the strain caused by fuel poverty by cutting your energy costs. This can involve turning off appliances that are usually kept on standby, changing your daily energy usage habits, replacing your appliances with more energy-efficient ones, and getting better insulation and double glazing to keep the heat inside.

Find a better energy deal

And of course, using a price comparison site such as usave to compare energy deals and find a cheaper tariff is another quick and easy way to make some savings!

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Author: Michael Quinn

Michael is a dedicated author helping usave to write guides, blogs and news for the last four years. When not writing articles, you can usually find him at wine tasting events or having a political debate on the night tube.