DECC’s latest fuel poverty figures in three charts
Government figures released today show around four million households in fuel poverty, slightly fewer than a year before. Three things in particular affect the numbers: energy prices, household incomes and where people live.
The Department of Energy and Climate Change (DECC) releases annual figures on fuel poverty. A household is considered in fuel poverty if it spends more than 10 per cent of its income on fuel costs. But this measure has been criticised for failing to recognise households’ different energy needs so the government now also measures fuel poverty on the basis of how much they have to spend for an ‘adequate’ standard of living.
Energy prices affect fuel poverty
Fuel prices have been steadily increasing over the last ten years and are “typically been the most influential factor in movements in fuel poverty”, according to the report.
Energy prices have rocketed compared to other goods. The chart below shows how energy prices have spiked in the last decade, while the cost of goods such as stir fry packets, t-shirts, and ebooks has increased more slowly.
Image - DECC energy RPI (note)
Over the last decade, the number of households in fuel poverty has always increased when fuel prices rose. The new figures show that in 2011 this wasn’t the case, however – energy prices increased, but fuel poverty levels decreased.
DECC says this is partly because fuel poverty figures are actually a combination of two years worth of data – so the 2011 price rise may hit figures in the next report. It’s also partly down to energy efficiency home improvements which meant energy consumption in some of the most impoverished households was reduced, DECC claims.
Household income affects fuel poverty
Fuel costs hit poorest households hardest.
The chart below shows the lowest income households are much more likely to be in fuel poverty than richer households. Over 70 per cent of the UK’s poorest households are in fuel poverty under the old 10 per cent measure.
Image - DECC household income (note)
This figure drops dramatically under the new measure to 44 per cent. Why is this? The new figures don’t include households with low energy needs. The justification is that although they may spend more than 10 per cent of their income on fuel costs, this isn’t considered necessary to adequately heat their homes.
The lowest income group are still the largest group in fuel poverty under the new measure, however.
House location affects fuel poverty
Where people live also affects how likely they are to be in fuel poverty. The map below shows many more households are in fuel poverty in the North and South West of England than in the South East.
This is because houses in those areas are likely to be older and less energy efficient, and average household incomes are lower – making those households more vulnerable to high energy costs.
