Policy Brief
Introduction
Households across the UK have experienced unprecedented rises in their energy bills, with severe consequences for fuel poverty. There is an urgent need to implement evidence-based solutions to these challenges. In March 2023, the Fuel Poverty Evidence project hosted an event that brought together academic research and professional perspectives from fuel poverty policy and practice. The discussion, and subsequent recommendations, reflected on evidence collected through academic research over the winter of 2022-2023 that has, in large part, been shared early and ahead of publication to maximise opportunities to inform and engage with policy and practice (see accompanying bibliography).
Given the continued high energy prices and the limits to energy support schemes, this coming winter of 2023-24 is likely to remain challenging for millions of households. Experiences will be exacerbated by households already facing diminished financial resilience and increased debt as a consequence of cost of living increases. A very cold winter would be particularly detrimental.
In this briefing we summarise the evidence gathered in the winter of 2022-23, and offer evidence-based policy recommendations, based on the discussion between panellists and participants about the evidence presented, to end the fuel poverty crisis and its severe negative impacts.
Experiences of the energy price crisis
Research findings highlight the unprecedented impact of energy price rises and the wider cost-of-living crisis on fuel poverty. The number of people seeking assistance from Citizens Advice has increased significantly, with 180 people getting help every hour, unable to afford basics such as food and a warm home. Research has found many reports of damp and mould caused by underheating of homes, and there is a deep sense of mental anguish among those at the sharp-end of price-rises. As the number of households in fuel poverty in the UK increased by almost half (40%) between 2021 and 2023, even households that are not on very low incomes are being pushed into fuel poverty. The situation is not projected to improve for some time, with National Energy Action estimating that approximately 6.3 million UK households will be in fuel poverty in this coming winter 2023-2024, only fractionally reduced from 6.7 million in 2022. This is further exacerbated by increases in standing charges, which has a particularly detrimental impact on low earning and low consuming households.
The crisis has had broad impacts on household finances, even with the energy support in place (i.e. the £400 energy bill discount paid in 2022 and the Energy Price Cap). Many households have already depleted their financial resources before their next salary payment, leaving them in a precarious financial state before the winter. Many have been forced to adopt new, intensified and often detrimental “coping strategies”, such as heating their home to a lower temperature, heating only one room, going into debt, and eating cold food. Worryingly, in some cases people are going without basic essentials and families are not able to meet the needs of their children, resulting in reduced food intake and adverse health, wellbeing and social effects that can have long-term impacts on education and life chances, and to health and length of life. The trope that people in fuel poverty must choose between “heating or eating” no longer applies in many cases, as people now must forgo both.
Structural challenges loom large, with numerous individuals finding themselves trapped within energy-inefficient housing, often unable to implement necessary changes due to housing types, legal constraints in rental housing, or lack of access to appropriate grant programmes. This dilemma is exacerbated by the escalation of other infrastructural costs, particularly in transportation, which serve to further erode people’s overall resilience. It is a sobering reality that certain demographics bear the brunt of these challenges, as for example people from ethnic minority backgrounds, disabled people, families, older people, and young persons are disproportionately affected. Furthermore, there is mounting evidence indicating that energy companies are failing to take substantial action in addressing these issues, further deepening the structural hurdles that impede progress towards resolving the fuel poverty crisis.
Breaking down the barriers to action is essential to fostering effective, lasting solutions. The scarcity of available support only exacerbates the difficulties faced by people and communities in addressing fuel poverty. A significant number of people remain unaware of where to seek advice on this critical issue. Trustworthy and pragmatic guidance proves hard to find, leaving individuals and families grappling with uncertainty. Additionally, those directly affected by fuel poverty often find themselves without a voice or agency to influence decision-makers. This lack of agency perpetuates the cycle of disadvantage. Agencies and organisations aiming to provide support are relying on funding that is often short-term and crisis-driven, falling short of meeting the escalating demand for assistance. The situation is further exacerbated by the difficult financial circumstances faced by many local authorities.
Recommendations
Addressing fuel poverty requires a comprehensive approach encompassing short-term interventions to support people through the immediate crisis, longer-term remediation of the UK’s poor housing stock, and systemic changes to the energy market.
Energy Market Reform
To address this crisis, fundamental alterations to the domestic energy market are imperative to increase resilience to price shocks and make the system fairer. This necessitates reform to reduce fuel price volatility, and offer a fairer service to those on low-incomes and in fuel poverty.
Three options offer considerable promise and warrant further consideration. These are not mutually exclusive and could be combined in a package of measures:
- Green Power Pool – A change to the electricity market pricing system, whereby the lower cost power generated by renewables is decoupled from the wholesale market (which is usually determined by the volatile and higher price of gas), and then sold in priority to vulnerable consumers.
- Social tariff (discounted energy bill for those in need) – Some bill support in 2022-23 was universal, and therefore poorly targeted, failing to offer adequate support to those who most needed it. However, given the spread of fuel poverty up the income scale, a social tariff must be available to those not on benefits but still struggling to meet costs.
- National Energy Guarantee – Restructuring energy tariffs so that every household is provided with an allowance of free or low-cost energy, sufficient to cover basic needs such as heating, cooking, and lighting. Energy consumption over the free allowance is charged at a progressively more expensive rate. Those with higher energy needs (e.g. those who have chronic illnesses, disabled people, or people living in inefficient homes) must be protected in such a scheme, for example with a larger basic allowance.
Insulating the housing stock
Investment is needed to raise the energy efficiency of the housing stock, including improving insulation and replacing heating systems. Evidence suggests that real household resilience to the issue will only be achieved once housing infrastructure is made energy efficient. This is a particular priority in the private rental sector, and could yield significant benefits in reducing fuel poverty. A tightening of the Minimum Energy Efficiency Standards (MEES) regulations to ensure that all rented properties achieve EPC Band C by 2028 is a necessary first step. Providing local authorities with extra resources to enable them to adequately enforce the MEES is also vital.
Immediate crisis response
While the market is being reformed and housing upgraded, there is still an acute need for immediate support and advice for those suffering with fuel poverty. We are again entering winter with very high bills, which will result in similar challenges as we saw last winter for a large number of households. As such, we recommend further energy bill support for the lowest earners, targeted through the Energy Bill Support Scheme, or by expanding the Warm Homes Discount. More broadly, social security payments should be sufficient to ensure everyone can afford the essentials.
As fuel poverty’s impact broadens across demographics, many households remain unaware of available support due to their limited interaction with conventional support systems like social services and local authorities. The absence of consistent and reliable guidance poses significant challenges for individuals, as does the sustainability of energy advice services which suffer from unstable funding. To bridge this gap, innovative approaches must involve public-facing services, including GPs and pharmacists, to disseminate information about accessible energy support. Prioritising additional funding for familiar and trusted advice providers like Citizens Advice, established local charities, and financial inclusion teams within social housing providers promises to yield the most impactful outcomes.
The rising price of fuel for heating homes does not only need to be addressed at the level of the individual household. Providing free, public warm spaces such as libraries and community centres for socialisation, work and relaxation, if well-funded, can address many other needs in addition to fuel poverty. However, retaining these important public spaces should never be seen as a substitute for a warm home.
Bibliography
Table of contributing projects – to be added
Reports
More than money: Moving towards a relational approach to retrofitting, Institute of Public Policy Research (2023)
Domestic Heating Transitions: A literature review, JUSTHEAT project (2023)
Warnings from Winter 22-23, Wellbased (2023)
Policy Briefs
How can policy protect fuel poor households from rising energy prices? (2022) Caitlin Robinson and Neil Simcock
Fuel poverty in the cost of living crisis (2022) Lucie Middlemiss, Aimee Ambrose, Neil Simcock, Mari Martiskainen, Graeme Sheriff
Articles
Curbing the crisis: the impact of Energy Cafés, Neil Simcock, Euro Health Net Magazine, July 2023
The UK Needs a National Energy Service, Stefan Bouzarovski and Neil Simcock, The Conversation, January 2023
One in four homes is hard to ‘decarbonise’ – without help their inhabitants could get stuck in fuel poverty, Aimee Ambrose and Rokia Raslan, The Conversation, December 2022
How to keep your home warm during very cold weather (on a budget) – and avoid dangerous heating hacks, Mari Martiskainen, The Conversation, December 2022
Energy crisis: The UK is still heading for widespread fuel poverty – despite the government’s price cap, Aimee Ambrose, The Conversation, September 2022
Blogs
Embedding intersectionality in policy research, Nickhil Sharma, Medium, September 2023
Danish Mould or English Cold? Sirid Bonderup, July 2023
Our Changing Heating Systems: Getting to the hearth of the matter, Aimee Ambrose, June 2023
Tackling Damp and Mould: Key takeaways from our expert Q&A, Sirid Bonderup, Jan Gilbertson, Rachel Harris, Valentina Marincioni, March 2023
Why has nothing changed since I was a kid living in a cold home? Jan Gilbertson, March 2023
Bringing Disability to Light: The Urgent Need for More Inclusive Fuel Poverty Policy, Carolyn Snell and Harriet Thomson, FPRN, February 2023
The UK needs a national energy service, Stefan Bouzarovski, Neil Simcock, Ami Crowther, January 2023
Fuel poverty is rocketing but where are the children in UK energy policy? Irene González Pijuan, December 2022
Fuel Poverty at Parliamentary Evidence Week, Lucie Middlemiss and Neil Simcock, November 2022
Websites
Lived experiences of fuel poverty, National Energy Action
Our policy research work, Citizens Advice
About fuel poverty, End Fuel Poverty Coalition
What are the effects of child poverty?, The Children’s Society
Academic papers
Who applies for energy grants?, Anne Owen, Lucie Middlemiss, Donal Brown, Mark Davies, Stephen Hall, Ruth Bookbinder, Marie Claire Brisbois, Iain Cairns, Mathew Hannon, Giulia Mininni (2023)
How do interventions for energy poverty and health work?, Lucie Middlemiss, Merrel Stevens, Pepe Ambrosio-Albalá, Victoria Pellicer-Sifres, Amy van Grieken (2023)
Eating, heating, or taking the bus? Lived experiences at the intersection of energy and transport poverty Mari Martiskainen, Debbie Hopkins, Gerado Torres Contreras, Kirsten Jenkins, Guilio Mattioli, Neil Simcock, Max Lacey-Barnacle (2023)
Public support for decarbonisation policies: Between self-interest and social need for alleviating energy and transport poverty in the United Kingdom Paul Upham, Neil Simcock, Benjamin Sovacool, Gerardo Contreras, Kirsten Jenkins, Mari Martiskainen (2023)
Energy justice intermediaries: Living Labs in the low-carbon transformation Stefan Bouzarovski, Dimitris Damigos, Zoltan Kmetty, Neil Simcock, Caitlin Robinson, Majd Jayyousi, Ami Crowther (2023)
Who is vulnerable to energy poverty in the Global North, and what is their experience?,Lucie Middlemiss (2022)
Policy pathways to justice in energy efficiency, Mark Bevan, Joanne Wade, Carolyn Snell (2018)