Energy crisis: 1.1m families face extreme fuel poverty in England and Wales with West Midlands worst hit

More than 1 million families and households are living in  extreme fuel poverty in England and Wales, despite the extension of the government’s energy support scheme, analysis by a leading environmental charity suggests.

Figures published today (20 March) by Friends of the Earth show 1.1 million households will be paying at least 20% of their disposable income towards energy costs in 2023. This is double the 10% benchmark  commonly used to indicate fuel poverty, putting the households in what it has dubbed extreme fuel poverty. Under the 10% measure at least 5 million households are living in fuel poverty in England and Wales, equating to one in five households.

Of those in extreme fuel poverty, 742,200 households were found to be paying 20 to 30% of their income on bills, while 196,500 were paying between 30 to 40% and 117,400 were paying more than 40%. They will still need to pay for housing, food, clothes and other expenses with their remaining income.

The analysis also found regional variations in the proportion of neighbourhoods in overall fuel poverty with the West Midlands and northern regions being the hardest hit. The charity took  official fuel, living costs and income data and factored in predicted energy price rises and government financial support to produce the research .

Campaigners say people have been risking their health and their lives by keeping the heating off while some are accumulating thousands of pounds worth of debt to keep warm, with older and disabled people more likely to experience the most severe levels of hardship.

Last week the Chancellor announced in the Spring Budget that the Energy Price Guarantee would be extended for an additional three months from April to June, saving a typical household £160. The Energy Price Guarantee puts a cap on the rate suppliers can charge customers per unit of energy, and means a typical household’s bill is limited to £2,500 per year (although those that use more energy than average will pay more than this).  But the Energy Bills Support Scheme – which gave all households £400 off their electricity bills between October 2022 and March 2023 – will come to an end, so bills will still go up.

Campaigners have called on the government to invest in  long-term solutions to reform Britain’s “broken” energy system, including a street-by-street insulation programme for the most in-need areas.

“Alongside better targeted support, the government must address one of the key drivers behind our hyper-inflated bills – the UK’s poorly insulated housing stock,” Sana Yusuf, warm homes campaigner at Friends of the Earth, said.

“With so few homes properly insulated in the neighbourhoods struggling most, rolling out a rapid, street-by-street programme of insulation is vital. This will save people hundreds of pounds each year on their energy bills and reduce the harmful emissions that cause climate change.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, said the government should look at “longer-term reform of Britain’s broken energy system so that people living on low incomes can access cheaper energy.”

Areas with the greatest proportion of fuel poverty hotspots in England and Wales

The analysis also identified small neighbourhoods that were particular fuel poverty hotspots, and then ranked local authority areas based on  what proportion of its neighbourhoods were among them.

The West Midlands was found to be the worst affected region – the top three local authority areas with the highest number of neighbourhoods regarded as fuel poverty hotspots are found in the region. These were Birmingham, Bradford and Sandwell, while Blaneau Gwent had the highest levels in Wales.

This interactive map will show you how your local authority compares to others. Click on a local authority to see what proportion and number of neighbourhoods in your local area are fuel poverty hotspots.

What is being done to help people with energy costs?

A Department for Energy Security and Net Zero spokesperson said: “We’re providing additional support to the vulnerable, including a £900 payment for those on means-tested benefits, £300 for pensioners and an extra £150 for disabled people.

“Improving home energy efficiency is the best long-term method of tackling fuel poverty. We’ve committed over £6.6 billion in this parliament to improve energy efficiency and measures available to help include the Home Upgrade Grant and the Social Housing Decarbonisation Fund.”