What is fuel poverty?
Until recently, the usual definition of fuel poverty was that a household was considered to be in fuel poverty when it needed to spend more than 10% of its income on fuel – or energy as it is often called.
However, in June 2013, the Department for Energy and Climate Change (DECC) published 'A framework for future action’ which set out the Government’s intention to adopt a new definition of fuel poverty.
This new definition states that a household is said to be in fuel poverty if:
They have required fuel costs that are above average (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 new definition also uses a fuel poverty gap. This is the difference between a household’s 'modelled' (average) bill and
what their bill would need to be for them to no longer be fuel poor.
Read the Department for Energy and Climate Change's Fuel Poverty framework
Key fuel poverty factors
The key factors that can contribute to fuel poverty are:
Number of households in fuel poverty is rising
The number of households experiencing fuel poverty is rising at the moment for several reasons:
The cost of energy keeps increasing, which means we need to spend more of our income on paying these bills
Many of us live in draughty homes, from which lots of heat escapes, and rely on heating systems that are old and inefficient. And because we do not have much money to spare, it is difficult to make our homes more energy efficient, which would reduce our bills
The general cost of living is rising and this is also putting pressure on our finances so we have less money to go around.