Over five million homes in energy crisis
Around 5.4 million households are spending more than 10% of their incomes on energy bills, an estimated increase of nearly two million in just two years.
Official figures from the Department for the Environment show the number of households in "fuel poverty" increased by nearly quarter between 2005 and 2006, hitting 3.5 million. But in light of budget-busting gas and electricity hikes this year, the current figure is now believed to be much higher.
Comparison wesbite uSwitch.com says that the two rounds of energy bill increases since the start of 2008 mean that families are now paying an extra 42% to heat and light their homes. It believes that this means around 5.4 million households are now spending more than 10% of their income on energy bills alone.
Of those in fuel poverty, around 2.75 million are ‘vulnerable’ households such as children, the elderly and those with a long-term illness.
Ministers have pledged to fight fuel poverty. The environment secretary Hilary Benn is currently meeting with energy suppliers and the home insulation industry to discuss how to speed up work on increasing energy efficiency in the UK's homes.
“The government is committed to tackling fuel poverty but sharply rising energy price rises have made this goal increasingly difficult,” she says.
Ann Robinson, director of consumer policy at uSwitch.com, says: "[The government’s figures from 2006] have further highlighted the struggle that many people face when paying their fuel bills. But two years on and 2008 is set to be remembered as the year Britain was crippled by inflation, soaring fuel bills and the rampant growth of fuel poverty.”
Robinson claims that pensioners, single income households face a real threat to their standard of living as fuel poverty becomes a part of everyday life.
"We cannot underestimate the impact that higher household energy prices will have on consumers - for many it will involve a complete shift in attitude and behaviour,” she explains. “People need to adjust quickly and there are two key steps to this - making sure we pay the lowest possible price for our energy and learning to use less of it."
MPs blame higher gas and electricity bills on the global energy crisis, which has pushed up the cost of wholesale oil. The energy minister Malcolm Wicks says: "It is the global demand for energy that is pushing up prices, but that is no comfort to the fuel poor who need our support. That is why we have required supply companies to improve social tariffs and it is why winter fuel payments for elderly people will increase substantially later this year.”
Despite this commitment, charity Age Concern warns the government’s measures are not nearly enough.
“We feel very strongly that much more needs to be done, starting by revising the government’s fuel poverty strategy,” says Helen Spinney, a spokeswoman for Age Concern. “It needs to work with energy companies to give those on limited budgets access to social tariffs, and tackle the inequalities of energy pricing that mean poorer people pay more.”
Spinney adds that thousands of anxious elderly people call its helplines each day, worried about how they will pay for fuel.
“A lot is said about choosing between heating and eating, but for thousands of elderly people that is the stark choice that they have to make,” she says.
Age Concern estimates that recent price hikes by energy suppliers will bring the number of elderly people in fuel poverty to 2.75 million by the end of the year.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).