500,000 at risk of fuel poverty after tomorrow’s price rises

Charity says new Household Support Fund welcome but not enough to prevent needless deaths this winter

Contact: Anna Cook, Head of Communications & Campaigns (anna.cook@nea.org.uk) Mobile: 07884 371913

• Tomorrow GB energy consumers are facing the biggest ever increase to the energy price cap.
• Fuel poverty charity National Energy Action (NEA) warns that the average increase of £153 for prepayment customers and £139 from those paying by direct debit using a default tariff is likely to result in more utility debt, 500,000 extra households in fuel poverty and an increase in preventable deaths this winter.
• Suppliers are putting their prices up in October when millions of people will see a reduction in their incomes, as uplifts to Universal Credit are withdrawn
• Charity says new Household Support Fund welcome but not enough to prevent needless deaths this winter
• Calls on UK Government to take more action to directly reduce higher prices for the poorest this winter and for Ofgem to do more to protect the most vulnerable consumers when suppliers fail.

 Adam Scorer, Chief Executive at fuel poverty charity National Energy Action (NEA), says:

“The massive devastating increases in energy prices will drive over 500,000 more households into fuel poverty, leaving them unable to heat or power their homes. Just when they were needed most, the uplifts to Universal Credit are also being withdrawn and inflation is soaring. The new Household Support Fund will provide some welcome support for those who can access it, but on its own it is not enough to halt the erosion in incomes and deal with rising prices. Without a wider package of support – keeping UC uplifts and more rebates to protect those on the lowest incomes from spiralling energy prices – vulnerable people are still at dire risk of premature death this winter”.

“Falling through the gaps when suppliers fail”

NEA warns that the current crisis is likely to badly affect vulnerable customers when their suppliers fail. The charity is warning that households on older prepay meters are at risk of not being able to top up with their new supplier if their current supplier fails. In addition, people in debt who transfer over to their new suppliers may also immediately risk aggressive debt recovery tactics from their previous suppliers’ administrators. People eligible for Warm Home Discount are also falling through the gaps when they move to their new supplier. They often can’t access all elements of this vital support. Scorer continues:

“We know this situation is preventable, but Ofgem must act fast to protect the most vulnerable consumers when suppliers fail. The UK Government must also use the upcoming Budget to provide more additional emergency support so we can guard against the consequences of soaring bills and hits to millions of low incomes. This means enhancing current schemes and taking new steps to accelerate the repayment of utility debts across the UK”.

 “Many of those on the lowest incomes live in the least efficient homes”

NEA has also stressed that one of the key reasons the situation is bleak for the poorest households is the vicious overlap between the households who live on the lowest incomes and who also live in the least energy efficient homes. They say in England alone, more than 680,000 households on the lowest incomes also live in the least efficient homes making the impact of the price rises much more severe. Over 3 million fuel poor households will need to be prioritised for retrofits if the goal to meet Net Zero is to be met at the same time as statutory fuel poverty targets. Scorer concludes:

“These quick emergency fixes are vital to get struggling households through this winter, but we can’t lose sight of the long-term solution to reduce the energy waste in our homes. We have some of the least efficient housing in Europe. This has left the UK more exposed to the current soaring gas price than many other countries and we are wasting billions of pounds each year as heat escapes through leaky roofs, floors and ceilings”.

 What needs to be done

As a summary, NEA is proposing emergency provision to help fuel poor households to stay warm at home this winter, including:

1. Providing additional funding towards the Warm Home Discount scheme this winter as an emergency provision to guard against significantly increased gas prices
2. Supporting more households with the Winter Fuel Payment, especially for those eligible for the Cold Weather Payment in Northern Ireland
3. Helping accelerate the repayment of utility debts across the UK by enhancing Fuel and Water Direct
4. Continuing the Winter Grant Scheme through this winter

Additionally, through the Spending Review, we propose the following longer-term actions to ensure that fuel poor households can be warm at home for years to come:

1. Fully implement the Conservative Manifesto for the Home Upgrade Grant Scheme (HUG) and Social Housing Decarbonisation Fund (SHDF)
2. Ensure the Shared Prosperity Fund (SPF) helps end cold homes across the UK
3. Extend and strengthen the £20 a week uplift in Universal Credit and Working Tax Credit for low-income households.  

 ENDS

Notes to editors

1. NEA works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm, dry home. For more information visit https://www.nea.org.uk/
2. Details of the price cap increase can be found here.
3. According to End Fuel Poverty Coalition estimates, over 4 million people are already estimated to be behind on their household bills and a 13% rise in the price cap would result in an additional 524,000 households in fuel poverty.
4. Last winter Public Health England (PHE) warned there is a damaging overlap between the health impacts of living in a cold home and Covid-19. Pre-existing chronic medical conditions such as cardiovascular and respiratory conditions, such as chronic obstructive pulmonary disease (COPD), asthma and heart disease are particularly badly affected by a cold home.
5. Whilst Ofgem have limited scope to keep the Default Tariff cap lower given the current primary legislation within the Domestic Gas and Electricity (Tariff Cap) Act 2018, NEA has contested they have the powers to provide much deeper protection for the most vulnerable customers. NEA has also underlined which changes need to be to the current Supplier of Last Resort (SoLR) process at last week’s Select Committee on the energy crisis.
6. NEA has recently submitted its views on how to address the energy crisis to the UK Government within its Budget submission, and highlighted its Spending Review priorities for energy efficiency.