Fuel poverty: 6 million to be in crisis thanks to bill rise – what is fuel poverty?

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Britain is fast becoming an unaffordable place to live for millions of ordinary people as the cost of living crisis plunges millions into fuel poverty. Ofgem announced last week that the energy price cap will rise by almost £700 per year as worldwide supply shortages push up the cost of wholesale gas.

The result is plunging millions into fuel poverty, and combined with other factors, millions of households are now struggling to make ends meet.

Inflation is at its highest rate for 30 years, having risen to 5.4 percent in the 12 months to December.

The cost of everyday goods like food, clothing and petrol has also increased – with the cost of a bag of pasta soaring by 114 percent in one supermarket.

In the initial aftermath of the worst of the coronavirus pandemic, it was never expected society and the economy would bounce immediately back into rude health – but the current situation is worse than many imagined.

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What is fuel poverty?

Around four million people in the UK are in the grip of fuel poverty, which means they are unable to afford to heat their homes to the temperature needed to keep warm and healthy.

In England, fuel poverty is defined as a household having required fuel costs that are above average and were they to spend that amount, they would be left with a residual income below the official poverty line.

In Scotland, Wales and Northern Ireland, fuel poverty is when a person needs to spend more than 10 percent of their household income on fuel.

But as many experts have warned, the situation will get worse – considerably worse – before it gets better.

Anita Dougall, CEO and founding partner of data analysts Sagacity, warned that two million additional UK residents could be plunged into fuel poverty this year.

Ms Dougall told Express.co.uk: “The price cap raise will ring alarm bells for many households across the UK.

“Families’ budgets are already stretched thinner than ever as the cost-of-living crisis escalates.

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“National Energy Action warns this price hike could send a further two million people into fuel poverty this year, bringing the total to roughly six million – that’s 10 percent of the UK population.

“Energy is a human right, and all energy companies have tariffs in place to support vulnerable customers.

“Yet, many people are unaware of this help and may be eligible for financial assistance without knowing it.”

What help is available?

The Government announced a package of £9 billion to help stave off the cost of fuel, including a £150 council tax rebate for those in bands A to D in England.

All households will receive £200 off their energy bills in October – but then pay the discount back by £40 a year over five years from 2023.

Ms Dougall also called on energy companies to do more to help the most vulnerable customers.

She continued: “Equally, the burden shouldn’t fall solely on consumers.

“It’s more important than ever for energy companies to proactively identify vulnerable customers by gaining a clearer understanding of who they are supplying and whether they need assistance.

“For example, providers could use third-party data to look for evidence of financial support, such as receiving benefits payments, pension credits or a lack of National Insurance contributions, which points to a lack of employment.

“They can then ensure these vulnerable customers get additional support and, where possible, are put on social tariffs so they can afford to heat their homes.

“As prices continue rising, providers must also share advice on how customers can reduce their energy consumption, making bills more affordable.”

A Government spokesperson said: “We know this has been a challenging time for many people, which is why we’re providing support worth around £12 billion this financial year and next to help households with the cost of living, including putting an average of £1,000 more per year into the pockets of working families, and we have announced a further £9 billion to protect against the impact of rising global energy prices.

“Our £500m Household Support Fund is also giving more help to the most vulnerable with essential costs such as food this winter, and our holiday activities and food programme is providing healthy food and enriching activities to disadvantaged children during major school holidays.”

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