Fuel poverty has long been recognised as a problem in society. It is generally assumed that a home spending more than 10% of its income on heating is in fuel poverty, though the actual definitions have recently changed slightly. You can read more about official government fuel poverty statistics by clicking here.
Causes of Fuel Poverty
Fuel poverty has unfortunately become an increasingly common term over recent years. There are a number of factors which have contributed to the rise in fuel poverty experienced throughout the UK, including:
- Rises in the cost of wholesale energy
- Inflation which is squeezing families disposable income
- The recession caused many people to lose their jobs and cuts to hours and incomes were also made.
- Inefficient heating systems – oil became a popular heating form in the 1980’s and many boilers have not been replaced since then (we even read of a user using a boiler form the 1960’s!)
- Poor quality of housing / lack of insulation in the home.
Government Legislation to Combat Fuel Poverty
At the turn of the century parliament passed the Warm Homes and Energy Conservation Act. This set legally binding targets to ensure that nobody lived in fuel poverty. Government attention around this time helped to dramatically reduce the numbers of people experiencing fuel poverty. However, since 2004, energy prices have been on an upward trend and more people are being affected by higher energy costs.
In recent years legislation has been passed, such as the 2008 Climate Act, which aims to lower carbon emissions in the UK. This will please green enthusiasts as there will be obvious environmental benefits. However, questions are now being asked as to whether or not the UK Government can limit its carbon footprint, while also tackling the fuel poverty suffered by low income families.
Wholesale Energy Market
The fuel industry is a volatile market. It is not practical for the Government to attempt to lower energy costs as the prices are often dependent on the politics and stability of oil rich areas. The heating standards of households affected by fuel poverty are often inefficient. This could mean a substandard boiler or a lack of insulation. It has been suggested that measures are introduced to improve the energy efficiency of low income households. The more efficient the heating systems of these homes are; the less they will have to spend on their heating bill. Those who are concerned with climate change also believe that this is the best way to reduce the amount of energy being used.
The UK has implemented a number of initiatives which aim to make the methods of improving energy efficiency affordable to those who need it the most. However, if everyone does maintain efficient heating systems, demand for fuel would drop. This would be considered a success for environmentalists but may adversely affect fuel prices. To combat that possibility it is not enough for the Government to combat fuel poverty by improving fuel efficiency.
Recommendations to combat fuel poverty
- If money is tight, contact your local Citizens Advice Bureau, who will be able to ensure you are receiving the correct benefits.
- Keep an eye on fuel prices and buy as much as possible when prices are low – we have seen a £70 difference in the price of 700 litres in 12 months!
- Visit the Energy Saving Trust at http://hec.est.org.uk/ who can provide details on energy efficiency improvements which can be made to your home with estimated cost savings.
- Visit our blog for some further money saving tips.