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Fuel poverty the gift of Christmas for 300k UK households

By Katie Anderson on December 19, 2012

A report published by the Fuel Poverty Advisory Group (FPAG) claims as many as 300,000 more households in the UK will suffer from fuel poverty this winter.

Fuel poverty is said to occur when a household spends at least ten per cent of its monthly or annual income on energy. Some 2.7 million households in England can be described as fuel poor, whilst the numbers are equally dire if not worse for people living in Wales, Scotland and Northern Ireland.

One of the main reasons why so many households are expected to join the ranks of fuel-poor homes in the UK this winter is the rising cost of energy. Five of the six leading energy suppliers in Britain increased energy tariffs before December, whilst E.ON announced last week that it plans to increase tariffs for gas and electricity early next year.

The ever-increasing cost of energy has coincided with economic problems that show little sign of easing; while real wages have decreased, unemployment (save for last month) and the cost of living have risen sharply. The result is that millions of households are being squeezed financially and eventually something has to give; unfortunately, that something in many homes would appear to be central heating or electricity.

According to the FPAG, the situation for Britons is set to worsen. By 2027, an estimated  63 billion would have been added to domestic energy bills. Carbon emission targets, EU regulations and continued investment in gas energy have been cited among the leading causes of rising energy bills.

As quoted by the BBC, the Chairman of FPAG, Derek Lickorish, explained: “A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky-rocket without radical action. Time is running out for the government to fuel poverty proof the homes of those on the lowest incomes”.

Ironically, government measures designed to help households (namely the Energy Company Obligation) could end up costing them more money. Around £116 could be added to the average annual energy bill in fuel-poor homes that do not receive adequate state support for installing energy-saving measures such as loft insulation and cavity wall insulation.