What is fuel poverty?
Fuel poverty definition in England and Wales
Until recently, the usual definition of fuel poverty was that a household was considered to be in fuel poverty when it needed to spend more than 10% of its income on fuel – or energy as it is often called.
However, in June 2013, the Department for Energy and Climate Change (DECC)* published 'A framework for future action’ which set out the Government’s intention to adopt a new definition of fuel poverty for England.
This new definition states that a household is said to be in fuel poverty if:
They have required fuel costs that are above average (the national median level), and
Were they to spend that amount they would be left with a residual income below the official poverty line.
This also uses a fuel poverty gap - i.e. the difference between a household’s 'modelled' (average) bill and what their bill would need to be for them to no longer be fuel poor.
Read the Department for Energy and Climate Change's Fuel Poverty framework for future action
* DECC was closed on 14 July 2016 by the Prime Minister Theresa May. Energy issues will now be covered by a new department called Business, Energy and Industrial Strategy.
Fuel poverty definition in Scotland, Wales and Northern Ireland
Scotland, Wales and Northern Ireland still largely use the old definition: that a person is living in fuel poverty if, to heat their home to a satisfactory standard, they need to spend more than 10 per cent of their household income on fuel.
Key fuel poverty factors
The key factors that can contribute to fuel poverty are:
The energy efficiency of the property (and therefore, the energy required to heat and power the home)
The cost of energy
Household income.
Number of households in fuel poverty is rising
The number of households experiencing fuel poverty is rising at the moment for several reasons:
The cost of energy keeps increasing, which means we need to spend more of our income on paying these bills
Many of us live in draughty homes, from which lots of heat escapes, and rely on heating systems that are old and inefficient. And because we do not have much money to spare, it is difficult to make our homes more energy efficient, which would reduce our bills
The general cost of living is rising and this is also putting pressure on our finances so we have less money to go around.
Coping with rising energy bills
Make sure you’re getting the best deal on gas and electricity
If you live in England, Scotland or Wales, there are lots of different companies supplying energy so you can choose to buy your gas and electricity from those that offer you the best deal. The Citizens Advice website has information about energy (NB: Make sure you look at the information for the country of the UK you live in).
The way you pay for your gas and electricity also has an impact the amount it costs
Buying both gas and electricity from the same supplier can cost less
Paying by monthly direct debit rather than quarterly bill usually saves you money
Some suppliers offer benefits such as money off future bills for switching to paperless bills
Gas and electricity can be more expensive if you use a pre-payment meter
Some energy companies offer you the chance to fix your energy prices over a certain period of time. This means your bills will not go up if the price of electricity or gas goes up – but remember that they will still go up if you use more energy.
Understand your statement and read your meters
A better understanding of the information provided on your statement could help you identify and solve problems at an early stage. The Citizens Advice website has a helpful online tool: Understanding your energy bill, which explains how and where to find the most useful information on the statements of each of the 'Big Six' energy suppliers. (NB: Make sure you look at the information on the website for the country of the UK.)
Bills are often estimated, so reading your meter and passing the reading on to your supplier will make sure you only pay for what you have used. The Citizens Advice website has information on how to read your energy meter (NB: Make sure you look at the information on the website for the country of the UK you live in by selecting it from the drop down box on the page).
Take steps to cut your energy use
You only pay for the electricity and gas that you actually use, so a good way for us to cope with rising prices is to try to use energy efficiently:
Cut your bills by turning the thermostat on your heating down by one degree and heating your home for one less hour a day.
Stop heat escaping by sealing skirting boards, using draft excluders in front of doors and letterboxes and drawing your curtains after dark. Double-glazing reduces the heat loss through windows by 50%
Save electricity by turning appliances off rather than leaving them on standby, unplug chargers and switch lights off when not in use
Do not over fill kettles and always put lids on saucepans when cooking
Only run washing machines, driers and dishwashers with a full load and use lower temperature settings. Driers use lots of electricity, so drying washing on a line will help cut bills
Switch to low energy light bulbs. They cost a bit more but last 12 times longer and help cut your electricity bills
Insulating your loft and cavity walls, installing an energy efficient boiler and switching to low energy appliances will all help cut costs.
Grants and Schemes
There are various grants and schemes available to help you cover the cost of fuel bills and make your home energy efficient. Winter Fuel Payments: This is a payment made to people who have reached Pension Credit age Cold Weather Payments: If you are on certain benefits, you may be eligible for these if the weather in your area falls to 0° centigrade or below for seven days in a row Warm Home Discount: If your electricity supplier belongs to this scheme and you're getting the guarantee part of Pension Credit, you will automatically get an annual discount of £140 off your electricity bill. You may also be eligible if you are on a low income and meet your energy supplier's criteria for the scheme. Grants for Energy Efficiency: If you are on a low income and claim one of a range of income and disability related benefits, you may be able to get a grant to help with the costs of improving the energy efficiency of your home. For example by updating heating systems or insulation.
What happens if I can't pay my bills?
If you are struggling to pay your energy bills, you may worry that your energy supply will be cut off. This is always a last resort for the energy companies so it is vital to talk to them straight away and try to work out a solution. Some energy companies have set up charitable trusts to help customers pay for fuel arrears. Some of these are listed on the Turn2us Grants Search. Once you have done the search on the first page of the tool, select the Energy and Water Providers category option at the top of the screen on the results page.You can also find out more by contacting your energy supplier directly. See Citizens Advice website information: Struggling to Pay Energy Bills (Make sure you look at the information relating to the country of the UK as what is available depends on the country you live in.) Citizens Advice Consumer Service can advise you on all matters relating to energy supply, including debt advice and access to cheaper deals. If you live in Northern Ireland, you can get debt advice from Advice NI and energy advice from the Northern Ireland Energy Advice Line. See also the Turn2us energy schemes information See also the Turn2us Debt information guide Priority Service Register You can check to see if you qualify to join the energy company's Priority Services Register (PSR) which provides free support services to people of pensionable age or who are living with a disability, chronic illness or a visual or hearing impairment. Suppliers are not allowed to disconnect supplies to your home if you are on the PSR during winter months. For more information, see the Citizens Advice website information: Getting extra support from your energy supplier (Make sure you look at the information relating to the country of the UK you live in as what is available depends on the country you live in.)
Useful resources
Turn2us has information on Energy schemes and Water schemes
The energy regulator Ofgem's website has information and support for consumers.
The Citizens Advice website has information to help you get the best energy deals, apply for energy-related grants and discounts, make energy efficient improvements and much more. (Make sure you read the information relating to the country of the UK you live in by selecting it from the drop down menu on the page)
Citizens Advice Consumer Service can advise you on all matters relating to energy supply, including debt advice and access to cheaper deals.
The Energy Saving Trust has detailed information on how to save energy at home.
Independent Age has the following guides:
Switching Energy Supplier
Maintaining Your Home
Paying for Home Maintenance and Repairs
National Energy Action is a national charity which aims to eradicate fuel poverty and campaigns for greater investment in energy efficiency to help those who are poor and vulnerable. Watch our Turn2us fuel poverty video Last updated: February 2020 Reviewed by Foundations July 2016 but no changes made.
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