Fuel poverty is a critical issue because it has direct implications for people’s quality of life. Not being able to afford to heat your home adequately can have serious health implications, particularly for vulnerable groups such as the elderly, children, and those with pre-existing health conditions. Cold and damp homes can increase the risk of respiratory problems, exacerbate existing health conditions, and increase stress and anxiety levels.
What is fuel poverty?
Fuel poverty is a term used to describe the situation where a household is unable to afford to keep its home adequately heated. The term originated in the UK in the 1970s during a time of rapidly increasing energy prices. It was first used in the academic context by Brenda Boardman in her 1991 book “Fuel Poverty: From Cold Homes to Affordable Warmth”.
Since then, fuel poverty has become a recognized and defined term in social policy, particularly in the UK and Europe. The term is not as widely used or recognized in some other countries, such as the United States, where similar issues might be discussed in terms of energy insecurity or energy burden.
In the UK, a more precise definition has been used. A household is considered to be in fuel poverty if they have required fuel costs that are above the national median level and, were they to spend that amount, they would be left with a residual income below the official poverty line.
The concept of fuel poverty highlights the intersection of several important social issues, including income inequality, housing, and energy policy. It is a reminder that while energy prices and energy use have important environmental implications, they also have direct and significant impacts on people’s quality of life. The ability to heat one’s home adequately is a basic necessity, and when people are unable to afford this, it can lead to significant hardship and health problems.
Causes of fuel poverty
Fuel poverty is a multifaceted problem that can be influenced by a variety of factors. Here’s a more detailed look at the main causes:
High Energy Costs: The price of energy is a critical factor. If energy prices increase significantly, it can push more households into fuel poverty. Factors influencing energy costs can include global oil and gas prices, renewable energy subsidies, and the operating costs of energy companies. Additionally, those on prepayment meters, often the most financially vulnerable, usually face higher tariffs.
Low Income: If a household has a low income, it can struggle to afford the energy it needs to heat its home adequately. Income might be low for many reasons – the household members might be unemployed, underemployed, or working in low-paid jobs, or they might be reliant on social security payments. Economic factors like inflation, wage stagnation, and high living costs can also contribute to low disposable income.
Energy Inefficiency of Homes: The energy efficiency of a home can have a significant impact on the cost of heating it. Older homes, in particular, can often be poorly insulated or have outdated, inefficient heating systems, leading to high energy costs. The cost of improvements can be prohibitive for low-income households, creating a vicious cycle where they cannot afford the upfront investment needed to reduce their ongoing energy costs. Inefficient homes are not only a problem for those living in them but also contribute to higher carbon emissions.
Lack of Affordable Housing: The lack of affordable, energy-efficient housing can contribute to fuel poverty. If people can’t afford to live in homes that are well-insulated and have efficient heating systems, they will end up spending a higher proportion of their income on energy.
Lack of Consumer Awareness or Engagement: Sometimes, households may be on a more expensive energy tariff than they need to be, either because they are not aware of the cheaper options available or because they find the process of switching suppliers too complex or daunting.
Social Factors: Certain groups may be more vulnerable to fuel poverty, including the elderly, those with disabilities, single-parent families, and people living in rural areas where homes may be off the gas grid and thus reliant on more expensive forms of heating.
Policy Factors: Government policies can influence fuel poverty levels, either positively or negatively. For example, social security policies can affect people’s incomes, while energy and housing policies can affect the cost of energy and the energy efficiency of homes.
Addressing fuel poverty requires tackling these issues in a holistic way, as they are often interconnected. For example, improving the energy efficiency of homes can reduce energy costs, but this might require government support or incentives, particularly for low-income households who cannot afford the upfront costs. Similarly, policies to increase incomes, whether through higher wages or more generous social security payments, can also play a role in reducing fuel poverty.
How can we address it?
Addressing fuel poverty is a complex challenge that requires a mix of interventions. These might include:
Energy efficiency measures: Improving the energy efficiency of a home can significantly reduce the cost of heating it. This might involve installing better insulation, upgrading to a more efficient heating system, or even smaller measures like draught-proofing.
Financial support: This could involve direct financial support to help with energy bills or broader measures to increase household income, such as increasing social security benefits or wages.
Fairer energy pricing: Interventions in the energy market could also help to reduce the cost of energy for those in fuel poverty.
Education and advice: Providing advice on how to reduce energy consumption and switch to cheaper tariffs can also help.
Each of these interventions can play a role in reducing fuel poverty, but it’s likely that a combination of measures will be needed to address the problem fully.
Fuel poverty is a significant issue, not just in the UK but in many other countries too. It’s closely linked to wider issues such as income inequality, social justice, and climate change. Addressing it is therefore a key part of creating a fairer and more sustainable society.
Unlike the previous Green Deal scheme which was loan operated, the Green Homes Grant offers grants of up to £5000 and £10,000 to wholly or partially cover the full cost of the energy saving measure.
The Green Homes Grant was set up to help improve the energy efficiency of properties across the UK, since many of the properties we live in are very inefficient, with solid walls, old heating systems and very little insulation. This scheme allows people to improve their homes without having to stump up the entire upfront costs of the works.
How does the Green Homes Grant work?
The Green Homes Grant is divided in to two separate grants, which each have different eligibility criteria.
£5000 – available to any home in England that fits the correct criteria for the specific measure. This grant covers 2/3’s of the full cost and caps at £5000. There will be a remainder in all cases using this grant and it will be paid as a customer contribution.
£10,000 – available to any homeowner receiving certain benefits listed here, and whose home fits the correct criteria for the specific measure. This grant covers 100% of the full cost up to £10,000 and the remainder is paid as a customer contribution.
e.g. Fitting external insulation on a small terraced house (approx 50sqm), using the £5000 green homes grant
The average supply and fit cost of external wall insulation is £120 per sqm (inclusive of materials, labour, VAT, skip hire, any extra remedial work required, scaffolding). Therefore, a 50sqm house would cost £6000.
In this case, 2/3’s of the full cost is £4000, so this is how much the Green Homes Grant would cover. The homeowner would pay the remainder of £2000.
e.g. Fitting external insulation on the same size house (50sqm), using the £10,000 Green Homes Grant
As above, the total cost of the works would amount to £6000. With the £10,000 grant, the whole £6000 would be covered by the Green Homes Grant and there would be no customer contribution.
If the house were bigger (for instance, 100sqm) the total cost would be £12,000, the Green Homes Grant would cover £10,000 of the amount and the homeowner would have to pay £2000.
Who can get the Green Homes Grant?
In theory, any home in England can access the Green Deal considering you are eligible, but the scheme has been specifically tailored to the private home owner or the private rental sectors. The reason being is that the social housing sector already has several ways in which improvements are funded and undertaken – namely the ECO scheme.
The following section talks a bit more about how the Green Homes Grant process works end-to-end – starting with a finding a Trustmark approved installer to quote for the works.
Find a Trustmark approved installer to quote you for the works. The installer will also have to be registered to specific certifications regarding the measure they are installing – MCS/PAS2035. It is recommended to get three quotes for comparison.
How does the Green Homes Grant help improve energy awareness?
The Green Homes Grant provides homeowners with knowledge of energy efficient home improvements. In turn, better energy awareness should drive occupiers to use their energy more wisely, which should drive down the cost people pay. For example: reducing the temperature of the hot water cylinder thermostat, installing central heating thermostats in the correct location, reducing water levels in kettles, washing clothes in ‘eco-mode’, and turning off unused high energy usage appliances like chest freezers should all help with lower energy bills.
We list 100 ways to save energy in the home here – even if you adopt a few, you should see some nice energy savings on your utility bills.
USwitch – how to save £100s on your energy bills in under 2 minutes!
June 6, 2013
Use Uswitch Now to save £100’s on your energy bills
I’ve been looking at my energy bills again this month, to make sure I’m not paying too much. I’ve been aware of energy companies changing their tariffs recently (aren’t they always?!) and so I wanted to make sure I don’t pay too much. My neighbour mentioned a website called uSwitch, so I’ve been online and had a good look at the options available to me and I thought I would share this information for this week’s blog.
uSwitch.com markets itself as a free, impartial, online and telephone-based comparison and switching service. They claim to help consumers compare prices on gas, electricity, water, heating cover, home telephone, broadband, digital television, mobile phones and personal finance products including mortgages, credit cards, current accounts and insurance.
It also hosts a range of guides advising the public on how to save money. It also regularly releases research covering technology, the energy market and financial developments.
For this blog, I was mostly interested in seeing whether I could save on my gas, water and electricity bills. So here’s how to do it.
Before you start you are going to need a few bits of information to hand, which can all be found on a recent energy bill or statement.
What you need to use Uswitch
Your gas & electricity supplier
The name of the tariff you have for each
The amount of electricity / gas you use annually (will be on your bill and is in kWh).
STEP 1. Firstly you plug in your postcode and email address (you don’t need to plug in your phone number).
STEP 2: Using your energy bills to help, fill in the 5 or 6 questions they ask about which supplier you are with, whether you are on a dual fuel tariff (i.e. the same supplier for both gas and electricity), how you pay your bills (don’t forget that direct debit is the cheapest way), whether you are on an Economy 7* meter.
STEP 3: Having entered all the information above, you get taken to the next page – a screen print of what it should look like can be seen below.
Here you need to enter the amount of kWh or gas or electricity you use (an average home uses about 17,000kWh of gas and 4,800kWh of electricity per year as a really rough guide). Entering these values will ensure you get the most accurate potential energy saving calculation.
If you can’t find these numbers anywhere on your bill, you can also enter your monthly, quarterly or annual spend on gas and electricity. This is not quite as accurate as entering the kWh but will still give a good guide to the amount of energy you use.
Uswitch allows you to see cheaper energy deals!
STEP 4: To show you the potential plans to swap to you have to tick the ‘Show plans we can switch you to today’ tickbox, then hit ‘COMPARE’.
STEP 5: On the next page, you will see all the tariffs that exist on the market that allow you to save on your energy bills. Just remember that you can get a variable rate plan or a fixed rate plan. If the energy companies decide to put up energy prices (see why they might here), then if you are on a variable tariff your monthly payments will increase. If you decide to go for a fixed tariff, be sure to take a note of when it is fixed until, since you will want to repeat the process at the end of the fixed contract (i.e. move to the cheapest supplier).
You can get started by putting your postcode below and hitting Compare Now.
So that’s it! Below I want to talk a little about my experience with Uswitch!
My Experience with USwitch
Uswith manages to display all the different tariffs in a really user friendly manner, starting with the one that will save you the most money, and all of these are tailored very specifically to you.
Having gone through the whole process, it showed me that I’m already on the cheapest electricity tariff, so I don’t have any plans to change at the moment. However, I did the same thing for my parents, and managed to knock £700 off their bill per year.
As soon as you select the tariff that you want, the rest is taken care of by uSwitch. There are no messy phone calls with utility companies – it genuinely is a 2 minute job.
Under the new legislation that came into force in February, energy companies have to tell you which is their cheapest option for you. But they are not required to switch you on to it, nor of course do they have to tell you about their competitors. Therefore it is still worth using uswitch to check the other providers (British Gas, E-On, EDF, nPower, Scottish Power and Southern Electric).
I hope this has helped with you also being able to save money on those monthly bills. My fixed energy price rate only lasts until July, so I will re-visit the uswitch website at the end of June and see what is available then. It’s already in the diary!
*What is Economy 7? If you pay two different rates for your electricity, your meter has two sets of dials, normally marked “high” and “low”. Also if your Meter Point Access Number (MPAN) starts with “02” then you have Economy 7.
If you want to go to Uswitch right now (although we will be sad you’re leaving!) click on the link below.
Author: Ed Mottram
2012 Environment and Energy Round-up; What Can We Do Differently in 2013?
January 15, 2013
2012 Positives in the UK
The year just passed showed some encouraging signs for renewables in the UK; Installed capacity was up almost 25% from 2010 to 2011 topping 12,000MW. In September, early figures for 2012 showed this figure exceeding 14,000MW. Mainstays of the UK renewables mix continued to see considerable upticks in capacity, but microgeneration has also made forward strides, with ever more solar panels and micro wind turbines seen in domestic settings. There was also the promise of the ‘Green Deal’ and the ‘Energy Company Obligation’ to help the average person become more energy efficient, which should make a huge impact in the coming years.
The Larger Political Picture
Taking a look at the bigger picture however, there are plenty of things to be concerned about. The global climate is showing the signs of man-made climate change and the UK has seen this up close and personal in 2012, with an extended drought giving way to the second wettest year on record; flooding affected much of the country, in some places more than once. Politically there were negatives as well, the COP18 in Doha once more struggled to progress global climate talks and on a national level, the Government has signalled its intention to focus on natural gas as a solution to the looming energy gap the country will face by 2015.
For those unaware, the UK is closing several of its coal fired power stations in the coming years, to fall in line with EU emissions regulations. It means that by 2015, energy capacity of the grid will not be sufficient to deal with peak demand. It is a pressing problem, which has prompted the government to look at importing gas to resolve the situation. Unfortunately natural gas only offers a small reduction in carbon emissions compared to coal, and the lack of a local supply means the UK will be relying on imports from other parts of the world like Russia and will be exposed to both volatile prices and political pressures.
Fuel Poverty and the Rising Cost of Energy
The rising cost of energy was also a big talking point in 2012. Most of the major energy companies hiked their prices well above inflation and the number of people in fuel poverty increased dramatically, with some surveys suggesting as many as a quarter of households have to choose between food and warmth during the winter months.
This is where new Government initiatives like the Green Deal will come into play. Aimed at those who cannot afford to pay for expensive energy efficiency measures up front, the scheme allows consumers to install measures and pay back the initial cost with the savings made. Energy efficiency has a huge role to play in both meeting carbon reduction targets and cutting energy use and hopefully the Green Deal will help deliver these aims on both a residential and commercial perspective. The Energy Company Obligation, designed to work where the Green Deal will not, will replace the Warm Front scheme, helping to provide energy efficiency measures for low income households.
Can Adversity Breed Change?
The flooding experienced during 2012 was unprecedented and many fear that climate change will mean these sorts of years will become more common in the future. Yet perhaps it can help change public opinion as well; it is a well known phenomenon that people tend not to change their lifestyles until it affects them directly. With the flooding affecting so many people across the country, perhaps the threat of climate change will begin to hit home. Microgeneration is a growing industry, and the added incentive of Feed-in Tariffs means independence from the grid is becoming a growing trend for homeowners and businesses alike.
Looking further afield, can the extreme weather events seen around the world in 2012, from the record low Arctic Ice coverage, to the Australian heat wave giving rise to the recent wildfires, to Hurricane Sandy hitting the US East Coast metropolises, create momentum for change at the UN climate negotiations? This year’s COP19 will be held in Warsaw at the end of the year, and the combination of the extreme weather in the world’s biggest economy, and the confirmation of Barack Obama as President, might be enough to change their standpoint to a more favourable position for those hoping for a binding agreement.
2013 and Beyond
So 2013 promises to be an interesting year for both UK and the rest of the world; at home, the focus will be on the ‘Green Deal’ and whether the Government can create momentum behind the scheme and the renewable energy sector, which it is hoped can build on the good progress made in the last few years and further expand renewable energy production in the UK. Globally, climatologists will be watching the extreme weather events around the globe, whilst Poland will draw the focus of the politicians anxious to sign a binding agreement (or not so anxious, as the case may be).
Avoiding energy poverty this winter
December 17, 2012
Fuel poverty means that 10% or more of your wage is spent keeping your home warm. In May 2012, the Government produced their fuel poverty report that highlighted 3.5 million people were living in fuel poverty during 2010. The report also forecasted 2011 and 2012 fuel poverty levels, predicting the total number would rise to about 4million, by the end of 2012.
A report released today by the Fuel Poverty Advisory Group estimates that the issue is far more pressing than the Government predicted with 300,000 more homes falling into difficulty this winter and the potential for millions of others to follow in the near future.
Fuel poverty is influenced by fuel prices, incomes and the energy efficiency of housing stock. All six of the big energy firms have either already raised their energy prices or have announced their planned increases, increasing energy prices by an average 7%.
With the economic situation as it is, aside from offering grants to help cover the fuel costs, the only viable course of action that the Government can take is to improve the energy efficiency of homes. In the sections below we describe the Government schemes available to homeowners and tenants each so people can hopefully avoid entering fuel poverty this winter
Initiatives that help cover the cost of your bills
The first two measures are short term and can really make a difference to lowering your energy bills, but don’t actually impact the energy efficiency of your home.
Warm Home Discount Scheme – energy companies setting aside funds to help their customers
This scheme is available to homes on low incomes and those vulnerable members of society to help them meet their energy costs. The funding is secured from the participating energy companies and given to two different groups of individuals: The core group and the broader group.
The core group of individuals is to receive a discount on their energy bills as long as they meet the following criteria, according to the DECC:
(i) Aged under 80 and receiving only the Guarantee Credit element of Pension Credit (no Savings Credit)
(ii) Aged 80 or over and are receiving the Guarantee Credit element of Pension Credit, (even if you get Savings Credit as well)
You may be in the broader group, where you don’t receive these benefits but you are as the government rightfully recognises: on low income; have long-term illness or are disabled, so need some help with energy costs.
So, what if I am in one of those groups, what do I do next?
If you are in the core group, you should receive a letter from the government telling you whether you are eligible to receive some help.
If you don’t receive a letter but still form part of the broader group, please speak to your energy provider who will take you through the application steps.
Winter Fuel & Cold Weather Payments – government helping those most vulnerable
There are two main benefits-linked payments that exist to help the vulnerable pay their energy bills during the winter months:
Winter Fuel Payment,
The Cold Weather Payment.
The main benefit is the Winter Fuel Payment, which according to the government website, may entitle you to between £100 and £300 tax-free funds to help with your heating bills.
So, what do I need to qualify?
Well, to qualify you need to have been born on or before 5 July 1951. You should get a Winter Fuel Payment automatically if you get the State Pension or another social security benefit, but not Housing Benefit, Council Tax Benefit or Child Benefit. You need to make one claim and you should get this allowance every year assuming your circumstances don’t change.
What happens next?
Most payments are made automatically now, between November and December, which means you should get help before Christmas. Also, different allowances will be paid out depending on your circumstances. For example if you are living together with someone who also qualifies, this payment may be halved as it is assumed you will be paying one heating bill.
…and when do Cold Weather Payments become relevant?
In addition, there is a ‘Cold Weather Payment’, which is enacted in special circumstances when there are successive cold days and heating needs to be turned up to maximum. There needs to be precisely seven or more recorded days where the thermostat is showing a temperature of zero degrees Celsius or below.
If you receive the following benefits: Pension Credit, Income Support, Jobseekers Allowance or an ESA you will be entitled to a £25 payment for every consecutive 7 days that the temperature is this cold.
Initiatives to improve the energy efficiency of your home
The next three initiatives actually improve the energy efficiency of your home which should help bring down your energy bills going forward.
Warm Front – helped 1000’s of homes become more energy efficient
The Warm Front is a scheme funded through the Carbon Emissions Reduction Target (CERT), which offers a grant of up to £3,500 to help homeowners install energy efficiency measures to reduce the running costs of their homes.
First of all, you need to fill out the application form to be assessed. The applicant needs to fulfil the following criteria:
The applicant must live in their own home or rent privately, and be in receipt of one or more of the following benefits:
Income Support or Income Based Jobseekers Allowance
Income Related Employment and Support Allowance (ESA IR)
Child Tax Credit and an income of £15,860 or less
Working Tax Credit and an income of £15,860 or less
In addition, the property that you live in must be poorly insulated and / or not have a working central heating system.
More information can be found here. However it is worth noting that this scheme is about to end its course by the end of March 2013 and to be replaced by the ECO (discussed below).
Now we look forward into 2013 and beyond and explore the measures that are set to improve energy efficiency in homes and small businesses up and down the country.
The Green Deal – set to be a game changer for energy consumption
Launched in October 2012, the Green Deal is an initiative that is set to dramatically improve the energy efficiency of all the homes in the UK. This initiative is available to all, as long as the energy efficiency measures suggested on your Green Deal report meet the ‘golden rule’ described later.
From January 2013, if you are a homeowner, landlord or tenant you can have the property assessed for the Green Deal and up to £10,000 invested to install various energy efficiency measures such as insulation, heating solutions or double glazed windows.
The benefit of this measure is that there is no up front cost if you are a home owner or tenant, but rather all the investment is paid back over 25 years through the energy bill. The measures such as floor and loft insulation will instantly save on your bills, which will be over and above the Green Deal charge.
So what are the next steps if you are a social housing tenant?
Make sure you speak to your council housing or housing association provider. If you would like to sign up to the Green Deal, it must be in agreement with your landlord. Ask your landlord if they have signed up for the Green Deal, which they are eligible to do now. Also speak to your neighbours about this and you can try and organise coordinated action, so the momentum for the Green Deal gathers pace!
Energy Company Obligation – additional help to the most hard pressed
Now, the Green Deal is underpinned by the ‘golden rule’ principle, which states that the cost to implement various energy saving measures must pay for by the estimated savings on the energy bills from having a more energy efficient home. But what happens if the golden rule is not met?
Well even if the golden rule is not met, the energy efficiency measures can be implemented anyway, via the Energy Company Obligation (ECO), provided eligibility criteria are met based on the two points below.
(a) Install energy efficiency measures to the low income and most vulnerable groups
(b) Provide energy efficiency to properties by installing solid wall insulation.
But, what happens next and how can I apply for this?
First of all you need to be in one of the lower income groups and what the DECC also defines as having more that 10% of your salary go to energy costs.
The precise details of this measure are still to be worked out. More information is coming though via the Energy Security and Green Economy Bill that will be making its way into parliament over the coming weeks. In essence it is meant to do what the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP) are doing right now, which is making sure that the big six energy providers ring fence an amount of spend each year to help out their ‘most in need’ customers.
So if you live in social housing, you need to make sure you speak to your landlord or association first and express your intention that you would like the property or the block you live in to be assessed for the Green Deal. If on the assessment your property doesn’t meet the ‘golden rule’, then you and your landlord need to take this up with your energy provider or the energy provider that services your block.
Again, it is very likely if the block of flats you live in doesn’t meet the criteria, then all the tenants will be in the same position and could benefit from this measure, which will bring down energy costs for everyone.
Help is there for those that want it
Fuel bill increases are not ideal, but unfortunately it seems like they are becoming a yearly occurrence, with five of the big six energy suppliers electing to increase their gas and electricity prices this winter (and E.ON announcing their increases for January 2013). These increased bills are hurting us all, but we hope the blog above has provided you with all the information you need to help reduce your energy bills. So you know what to do!
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