Fuel poverty

Fuel poverty is a serious and growing problem in London. In 2008 the GLA estimated that 24 per cent of London’s household’s were fuel poor. Since that time energy prices has risen considerably, and the percentage of households in difficulty is now likely to be higher.

The health implications of living in a cold home can be very serious. Children growing up in poorly heated conditions are twice as likely to suffer from a variety of respiratory problems as other children, and Early Winter Deaths are three times higher in the coldest quarter of our housing stock compared to the warmest quarter.

London Councils has examined what the introduction of Universal Credit could mean for fuel poverty in London when it is introduced in 2013. Our analysis of incomes and costs for Londoners, both working at minimum wage levels and not working, and receiving the Universal Credit shows that:

• At anticipated 2012 energy prices single parents out of work are likely to be in fuel poverty.
• Families with children where both parents work will have to spend a higher proportion of their income on energy bills than similar families where only one parent works. This situation is unlikely to incentivise both parents to enter the workplace.
• Should bills increase by as much as 30 per cent (equal to the average price increase seen between 2005 and 2010) single parents and couples where no adults work will be in fuel poverty.
• In the case of couples in full-time employment with three children the proportion of their disposable income (‘spending power’) needed for energy bills could be as high as 20 per cent.

Fuel poverty can be tackled in several ways: boosting household income, reducing energy prices or improving the thermal performance of homes. All of London’s local authorities are involved in the RE:NEW scheme which is promoting the retro-fitting of energy efficiency measures in housing across the capital. You can read more about the scheme here.

Our report on the possible implications of the Universal Credit can be downloaded below.