Fuel poverty

‘Fuel poverty’ is a term used to identify households that are pushed into poverty because of the amount they spend on fuel. Fuel poverty is contributed to by the energy efficiency of the property, the cost of energy and household income.

In England, the government adopts the Hills Low Income High Costs (LIHC) definition of fuel poverty, which considers a household is in fuel poverty if:

• They have required fuel costs that are above average (the national median level).
• Were they to spend that amount they would be left with a residual income below the official poverty line.

Before the introduction of the Low Income High Costs definition in 2013, fuel poverty was measured under the 10% indicator. This suggested a household was in fuel poor if they needed to spend more than 10% of their income on fuel to maintain an adequate standard of warmth, defined as 21ºC for the main living area, and 18ºC for other occupied rooms.

The change followed publication of the 2012 Fuel Poverty Review by John Hills, commissioned by Chris Huhne MP, then Secretary of State for Energy and Climate Change, in March 2011. This suggested we should focus attention on individuals in households “living on a lower income in a home that cannot be kept warm at reasonable cost”.

In England, fuel poverty is modelled using data from the English Housing Survey (EHS) based on an interview survey with the householders and a survey of the physical features and condition of the dwellings.

The fuel poverty statistics for 2015, published by the Department of Energy & Climate Change (DECC) suggest that in 2013, 2.35 million households in England were in fuel poverty, that is, 10.4% of all households. This is broadly unchanged from the 2012 figures.

NB: At present the Hills LIHC definition is used to measure fuel poverty in England, whilst the 10% definition is used in Scotland, Wales and Northern Ireland.

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