Fuel Poverty: A Smarter Approach

Approximately 13.4% of households in the UK are classified as being ‘fuel poor’.

Keith Bastian, CEO of clean energy supplier Outfox the Market and electric home heating provider Fischer Future Heat explains how homeowners can adopt a smarter approach to avoid fuel poverty this autumn. Before a change in definition in 2013, a household was considered fuel poor if it spent more than 10% of its annual income and energy.

However, fuel poverty is currently measured by two things;

Whether a household’s fuel costs are above average.
Whether their disposable income is below the poverty line.

Figures from 2018 demonstrate that one in 10 households were classified as fuel poor. Data from 2019 shows that the average fuel gap was an estimated £216, down by four per cent from the previous year. The aggregate gap in England was down 13.2 per cent at £687m.

The average gap is also used to calculate fuel poverty. The average gap is the difference between a household’s average bill and what this bill total should be in order for the household to be no longer considered fuel poor.

The aggregate gap is the combined sum of all fuel poor household’s gaps.

Causes of Fuel Poverty

It is also important for homeowners to remember that the definition of fuel poverty varies considerably depending on location. In 2020, the UK Government revealed that the majority of local authorities in the North West, London and the West Midlands had the highest levels of fuel poverty in the country. Overall, the fuel poverty status of a household is dependent on three factors;

Energy efficiency
Incomes
Energy prices

However, we are going to begin to see even more families and households experiencing fuel poverty, regardless of location. This is due to the industry regulated energy prices being set to rise in October on standard variable tariffs. A 12% increase will take the cap, which applies to 11 million UK households, to £1,277. This the highest level ever.

A Knock-On Effect

Whilst many homeowners argue that fair isn’t always the same as affordable, stakeholders and businesses are doing what we can to ensure that people aren’t being forced to choose between heating and eating. Winter is a tough time for many. A 12% increase of the energy price cap will only add to this.

Of course, it should be noted that many fixed term deals can shield customers from the effects of industry regulated price hikes. Sometimes, locking yourself into a 12-month deal or longer can pay dividends, particularly when you account for the fact that standard variable rates have so far risen twice this year.

Ways to Avoid Fuel Poverty

Young children and the elderly are the most vulnerable when experiencing fuel poverty. However, there are a few things that can be done to help those in need. During the last eighteen months, we have all lived through unprecedented events. It is imperative that people take control of their finances whenever they can.

They can do so by adopting a smarter approach to energy.

Switch: Whoever your current energy provider may be, don’t be afraid to shop around and look elsewhere for a better deal. Always consider price, sustainability and benefits. You’ll soon find a provider that ticks all of your boxes. Switching energy provider is the most effective and impactful way of taking control, but don’t always trust price comparison sites.

Update boiler systems: Don’t use inefficient boiler and water systems. If your boiler or centralised heating system is old, outdated and inefficient, then you could be using more energy than you need. The average life of a boiler is 10 to 15 years, but only when well maintained. Homeowners can either take care of their current boiler, or look at getting it replaced with something renewable and efficient. The UK Government is currently investing massively in renewable forms of energy, with home heating squarely in their agenda. If your boiler is at the end of its shelf life, consider investing smart and looking at something that will future-proof your home.

Heat smart: Be smart about heating your home. Don’t waste heat, and only heat rooms when they are in use. With traditional central heating the entire house is heated, when only one or two rooms may need it. By switching systems or utilising dynamic direct acting storage radiators, homeowners are able to heat up each room individually and maintain comfort with stored heat without any waste or unnecessary costs. This is particularly beneficial for those on a tight budget, or those with large homes with lots of rooms to heat. If we change our user profile and use more heating that allows you to control usage based on the rooms you use, this will deliver warmth in a efficient manner. This is effectively the only true mechanism of control a user has to reduce consumption and bills for a sustainable future.

Electric is not only one of the cleanest forms of energy around, but electric radiators also ensure every kW of energy produced goes into heating a room, maximising efficiency.

There are Government schemes and incentives to be considered for those that are eligible too. Whilst fuel poverty is very much an important current issue, by working together we can do our best to combat it.

This article has been published in the following online publication

Energy Crisis: How to cut YOUR heating costs as fuel poverty threat rises GAS prices are on the rise, leaving more households across the UK at risk of fuel poverty – but what are the money-saving alternatives to traditional gas heating in your home?

Click here to read the article

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Fuel Poverty: A Smarter Approach