Fuel Poverty Is Expected To Rise

The government’s annual fuel poverty statistics report was released on the 28th February. The energy crisis is clearly reflected within the reports findings, and follows on from Ofgem’s latest price cap announcement. Some of the headline paragraphs from the report are below:

The average fuel poverty gap, which measures the depth of fuel poverty, increased by 33 per cent between 2021 and 2022 in real terms due to rising energy prices.”

These statistics also include an affordability measure of the number of households who are required to spend more than 10 percent of their income (after housing costs) on domestic energy. In 2022, 30.3 percent of households (7.39 million) exceeded this threshold up from 20.5 per cent in 2021 (4.93 million). “

It is projected that in 2023, fuel poverty will increase to 14.4 per cent (3.53 million) with the average fuel poverty gap rising by 31 per cent in real terms to £443 (in 2022 prices). ”

In 2022, fuel poor households were required to spend a median cost of £1,900 on their energy bills after rebates, 46 per cent (£600) more than Low-Income High Energy Efficiency households (£1,300).”

Adam Scorer, CEO of the charity National Energy Action stated: “Over 3.2 million households in England are in fuel poverty according to Government data released today but the worst of the energy crisis is not represented – people being forced to self-disconnect, struggling with ice on the inside of their windows and living with damp and cold.”

Price Cap Reduced But Bills Expected To Rise

On Monday 27th February, the energy regulator Ofgem announced its quarterly update to the energy price cap for the period 1 April to 30 June 2023. “From 1 April the energy price cap will be set at an annual level of £3,280 for a dual fuel household paying by direct debit based on typical consumption”

Households had received a level of protection from the previous high price cap due to the Government’s Energy Price Guarantee (EPG) which capped the energy price unit charge. Bills are likely to rise, despite the reduction in the price cap, as the EPG threshold will be increased from 1 April.

Commenting on the high bills, the Ofgem CEO, Johnathon Brealey stated: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee. This means, that on current policy, bills will rise again in April. I know that, for many households this news will be deeply concerning”.

Some Hope For Winter?

Cornwall Insights, who examine energy market trends, have indicated that the prices for next Winter may start to go down; There is some cause for optimism, while the price cap fall may not offer immediate relief for consumers, if wholesale prices continue their downward trajectory, we currently predict that the price cap will fall below the EPG in July. This will provide much-needed relief to struggling households currently waiting to see falling wholesale prices trickle down to their bills.”

The Response from Groundwork

The UK has the least well insulated housing stock in Europe, and it’s vital that we change this – retrofitting our homes and buildings alongside the shift to renewable energy sources. Suspending green levies while ramping up fossil fuel production puts communities at greater risk from climate change in the future.”

“We are glad to see the government extending support with energy bills for a further three months and taking steps to tackle the injustice of higher costs for people on pre-payment meters.

“However, more needs to be done to ensure everyone is able to access the energy they need to stay warm and well.  Even with government support in place, our Green Doctor energy advisors have been shocked by the level of hardship households have experienced this winter.

“To avoid people suffering unnecessarily in the winters to come, we need a radical plan to eliminate fuel poverty, through increasing the energy efficiency of homes, providing better coordinated advice to the most vulnerable energy users, and investing in the skills and jobs we need to transform our energy infrastructure.

“Doing this is vital to preventing the worst effects of climate change, reducing health inequalities and creating more prosperous communities.”

Graham Duxbury, Chief Executive at Groundwork UK.

Here at Groundwork we can offer impartial energy advice to anyone struggling with their bills through our Green Doctor service. During a Green Doctor consultation, our energy experts can help you reduce your energy usage; keeping you well and warm.

The Green Doctor can also help you access financial initiatives to contribute towards your bills and signpost to other organisations in your community who may be able to help.

See what free support is available in your area: www.groundwork.org.uk/greendoctor

We also provide a Green Doctor series of videos on YouTube that offer practical energy saving advice for your home.