Tackling Fuel Poverty (last updated September 2018)

There is a social gradient in fuel poverty: the lower your income the more likely you are to be at risk of fuel poverty, which has a significant impact on the health, social and economic well-being of people living in cold homes. Those most vulnerable to fuel poverty and cold homes include older people, lone parents with dependent children, families who are unemployed or on low incomes, children and young people, disabled people, people with existing illnesses and long-term conditions, and single unemployed people. Respiratory diseases are worse for people living in cold homes, and other chronic health conditions are aggravated, alongside a greater risk of strokes and heart attacks. Living in a cold home also has a negative impact on the emotional and mental well-being of all members of the household (including worrying about bills and health) and can have an effect on children’s performance at school.

Health and well-being inequalities caused by living in fuel poverty potentially lead to a greater reliance on public services for health and other well-being support. By reducing the risk of householders living in fuel poverty in Wales we can help reduce the negative impact on people’s lives and the pressure on public services.

Households are considered to be in fuel poverty if they have to spend more than 10% of their household income on fuel to keep their home in a ‘satisfactory’ condition¹. The Welsh Government estimated that in 2012 there were 364,000 households in Wales living in fuel poverty, which is 29% of all households ^[i].

Further modelling was undertaken by Welsh Government to produce estimated fuel poverty data at local area level for 2015. This found levels of fuel poverty in Denbighshire in the 22.5% to 23.5% range, and in Conwy in the 23.5% – 24.5% range, reflecting the overall 2015 national estimate of 24%.

The Welsh Government’s latest estimate (2016) is that there are 291,000 households in Wales living in fuel poverty, equivalent to 23% of all households in Wales.

Although fuel costs have generally continued to rise over recent years, the number of households in fuel poverty is decreasing due to the national and local energy efficiency schemes, such as NEST and ARBED, which have targeted households in fuel poverty over the past few years – an estimated decrease across Wales of about 73,000 households since 2012^[ii].

Levels of severe fuel poverty (defined as any household having to spend more than 20% of households income on household fuel costs), were estimated at 3% (43,000 households) across Wales in 2016.

National research by the Department for Business, Energy and Industrial Strategy has shown that those most affected by fuel poverty are currently single parent households^[iii]. In 2016, 26.4% of those categorised as single parents were found to be in fuel poverty, more than ten percentage points above any other household composition. Single parent households account for 5.5% of all households in Conwy CB and 6.2% in Denbighshire.^[iv].

The three main drivers of fuel poverty are income, energy efficiency and energy prices.

Fuel poverty can be a particular problem in rural areas, which may not be attached to gas mains and may have to rely on solid fuel or gas/oil supplies which frequently costs more than electricity and gas and can only be bought in large quantities, resulting in sizeable upfront costs.

Older housing can also be more difficult to make energy efficient as it was constructed using building methods and materials which are not easily adaptable to 21st century standards for insulation or heating system installation. Stone built properties are a particular problem.

The average electricity bill across all payments types rose by £33 (5.6%) between 2016 and 2017, giving an average total bill of £619. The average 2017 gas bill fell by £20 (3%) to £630^[v].

[i] Fuel Poverty Strategy 2010, Welsh Government; The Production of Estimated Levels of Fuel Poverty in Wales: 2012-2016, Welsh Government

[ii] A future demand-led fuel poverty scheme to succeed Welsh Government  Warm Homes – Nest, Welsh Government consultation document, August 2016

[iii] The Production of Estimated Levels of Fuel Poverty in Wales: 2012-2016, Welsh Government, July 2016

[iv] Households by Type and Year 2016, StatsWales

[v] Annual domestic energy bills, Department for Business, Energy and Industrial Strategy

[1] The definition of a ‘satisfactory heating regime’ recommended by the World Health Organisation is 23°C in the living room and 18°C in other rooms, to be achieved for 16 hours in every 24 for households with older people or people with disabilities or chromic illness and 21°C in the living room and 18°C in other rooms for a period of nine hours in every 24 (or 16 in 24 over the weekend) for other households