Category: Reports

Fuel poverty statistics reveal households hit hard by energy bills crisis

New data published by the Department for Energy Security and Net Zero has revealed that a surge in the numbers of households spending more than 10% of their income on energy in England.

The number of households who are required to spend more than 10% of their income after housing costs on domestic energy has risen to 36.4% of households (8.9 million households) up from 27.4% in 2022 (6.7 million).

Meanwhile, the average fuel poverty gap (which measures the additional money a household would need to be lifted out of fuel poverty) has increased by 66% between 2020 and 2023 in real terms, due to rising energy prices.

E3G UK energy lead, Juliet Phillips, explained that for those already in fuel poverty, things have got significantly harder:

“It is shameful that in a country as wealthy as England, so many households cannot afford to heat their homes to a healthy and comfortable level. New statistics show that no progress has been made in reducing fuel poverty rates in the past year, and that for those struggling to pay their energy bills, things have gotten a lot worst.

“We have seen a concerning inertia from the government over the last year on action to upgrade homes. This included a U-turn on the planned increase in energy efficiency standards in the private rented sector, and a significant under-delivery of the retrofit schemes designed to alleviate fuel poverty.

“If the UK is to have any chance of meeting its statutory target to end fuel poverty by 2030, a long-term plan is needed to rebuild confidence in supply chains: backed by investment and regulations to drive action to deliver warmer homes across the country.”

The statistics also show that households in the private rented sector are at the highest risk of fuel poverty. This follows Rishi Sunak’s U-turn on the planned uplift to minimum efficiency standards in the sector last year.

Jonathan Bean, spokesperson for Fuel Poverty Action, commented:

“Fuel poverty rates are highest in private rentals so the Government’s lack of commitment to improved standards will continue to harm millions.

“In addition, electric-only homes have the highest fuel poverty rates due to the four times higher price of electricity compared to gas, due to our rigged energy market which the Government and Ofgem have failed to reform.

“It is time to admit Government and Ofgem policies have completely failed, and a more radical solution to fuel poverty is needed – Energy For All.  This would eradicate fuel poverty now, rather than allowing millions to suffer in cold damp homes for another decade.”

The statistics show that there were an estimated 13.0 per cent of households (3.17 million) in fuel poverty in England under Ministers’ preferred measure of fuel poverty, known as the Low Income Low Energy Efficiency (LILEE) metric in 2023. This number is effectively unchanged from 13.1 per cent in 2022 (3.18 million).

A spokesperson for the End Fuel Poverty Coalition explained the limitations of this metric:

“Even these terrible figures don’t paint the true picture of the suffering in households across the UK.

“They exclude millions of homes in certain energy performance categories, fail to take into account soaring energy costs and also don’t include many people who actually get a Warm Home Discount to help with their bills.

“The reality is that household energy debt is at record levels, millions of people are living in cold damp homes and children are suffering in mouldy conditions.

“The wider impact of high energy bills is also clear to see with households having to cut back on spending so much that the UK has now entered a recession.”

Nearly 1 in five households in the West Midlands are classed as fuel poor. Meanwhile, in the South West, it would take an extra £634 to lift homes out of fuel poverty.

The latest National Energy Action (NEA) Fuel Poverty Monitor, developed with Energy Action Scotland and Gemserv, highlighted over 3 million UK households could be left in fuel poverty by the end of the decade, despite a legal requirement for no households in England to be living in fuel poverty by 2030.

Adam Scorer, Chief Executive of National Energy Action, added:

“At this rate, the government will miss its 2030 legal fuel poverty target by a country mile and millions will be stuck unable to afford to keep their homes and their families warm and well.”

New polling by YouGov for NEA shows that three in 10 (30%) GB adults say their household has found it difficult to afford to pay their energy bills in the past three months.

This has driven many to drastic ‘not coping strategies’ with 59% of British adults saying they had turned their thermostat down lower than they wanted, while 52% turned their heating off, even though it was cold inside the house.

Revealed: The charges keeping electricity bills high

Freezing households are being hit by 14 obscure energy charges that are keeping electricity bills expensive.

The figures are revealed in the latest Warm This Winter Tariff Watch Report by researchers at Future Energy Associates which examines the electricity network costs which are added to customers’ standing charges and bills. [1]

Among the 14 charges which get passed onto bills through the Ofgem price cap, customers are hit by costs such as the ‘Non-Locational demand residual banded charge’, ‘Available Supply Capacity Charges’, ‘Electricity Systems Operator Internal Allowances’ and ‘Ancillary Services costs.’ [2]

Also hidden in the charges are so-called “Line Losses” which set out the amount of energy lost while transmitting electricity around the network. These losses are added to consumers’ bills as a set amount, rather than reflecting the actual wastage incurred.

The combined impact of some of these costs and charges has meant Electricity Standing Charges have surged 119% since winter 2020/21 and account for £194 a year for every household. 

Separately, the report reveals rules which allow Distribution Network Operators (DNOs) who maintain and upgrade the grid to keep money charged to consumers but not spent.

The DNOs forecast budgets in advance and overestimation of these costs can mean that DNOs underspend and could potentially profit under a complex system called the “totex incentive mechanism” (TIM). This splits the benefit of any underspend between customers and the DNO. 

Between 2015 and 2022, DNOs spent £933 million less than they forecasted, but those that did underspend will have only given around half of that money back to consumers. [3]

The new findings also reveal that energy firms have underspent on plans to upgrade the electricity network. While these firms have overspent on short-term costs, the lack of investment in the grid is one of the reasons that electricity prices remain high despite Britain’s successful renewables industry. [4] 

The Warm This Winter Tariff Watch report also paints a poor picture for consumers looking to switch around for the best energy deal. While there are more tariffs on the market, the researchers could only find a handful of deals worth switching to and these all came with complex conditions or caveats.

Two groups which continue to lose out are those who pay on standard credit terms and are subject to a 6.2% premium and those on Economy 7 tariffs. 

One EDF overnight tariff, aimed at EV owners, offers an average nighttime electricity unit rate of just 8.00 pence per kWh across all DNO regions. In stark contrast, the Standard Variable tariff, serving as an Economy 7 equivalent from the same firm, imposes a significantly higher night-time unit rate of 16.63 pence per kWh.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The complex world of electricity pricing should now be firmly in the sights of regulators and ministers.

“There must be a review into how we have arrived at so many covert charges and Ofgem must improve the transparency in the calculation of how our standing charges are arrived at.

“Of particular concern is the system whereby we are paying upfront for vital infrastructure upgrades which could help bring down electricity bills, but which are seemingly not delivered.

“We need a full audit of what has been charged, what has been spent and what could be returned to the bill payer.”

Fiona Waters of the Warm This Winter campaign, which commissioned the report added:

“The findings of the latest Tariff Watch Report reveal a disgraceful picture.

“Hardup households are being punished multiple times by energy giants. Our energy bills are still forecasted to remain well above 2021 levels for the rest of the year and the vital grid infrastructure upgrades needed to bring electricity costs down are potentially not being delivered.

“Perversely, the failure to upgrade and maintain the grid then results in line losses, which consumers also have to pay for via their bills.”

Dylan Johnson, Director at Future Energy Associates commented: 

“Ofgem must improve transparency around Distribution Use of System (DuOS) charges. There’s a clear need for a centralised repository on their website, detailing these costs, and the formulas used for their calculation. 

“Additionally, Ofgem should revisit their methodology for Line Losses, especially as we transition to a more decentralised energy system. 

“For instance, in areas like Cornwall during sunny hours, Line Loss calculations must reflect the reduced losses when electricity is generated and consumed locally. This change is crucial for a fair and efficient energy system.”

ENDS

[1] This press release refers to England, Scotland and Wales only. For full details, methodology and sources, the full report is available to download: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch-3-FINAL.pdf

[2] Full list of charges:

  1. Non-Locational demand residual banded charge – all domestic users contribute to the fixed costs of maintaining the transmission network.
  2. Transmission Network Use of System Non-Half-Hourly demand tariff – cost of using the transmission network to supply electricity and factors in the cost of infrastructure investment and the need to ensure network reliability and capacity for future demands. Paid by consumers on unit rates.
  3. Distribution Use of System Consumption Charges – charges are based on the electricity consumption of an organisation, with rates varying according to the time of use.
  4. Meter Point Administration Number Standing Charges – a fixed daily charge applied per Meter Point Administration Number (MPAN), covering the fixed costs of electricity distribution.
  5. Available Supply Capacity Charges – These are levied based on the assigned Available Supply Capacity (ASC) of an organisation, with higher capacities incurring greater charges.
  6. Reactive Power Charges – Applied for the reactive power used by an organisation, which is essential for maintaining voltage levels within the distribution network.
  7. SOLR Fixed charge – to cover costs associated with collapsed energy firms
  8. Excess SOLR Fixed charge – to cover costs associated with collapsed energy firms
  9. Eligible Bad Debt Fixed Charge Adder – an additional charge to cover the costs associated with uncollectible debts.
  10. Balancing Use of Systems Balancing Mechanism – when there is a variance between scheduled energy generation and actual demand, the Balancing Mechanism activates to maintain grid stability.
  11. Ancillary Services costs – this covers a range of services, including frequency response, demand flexibility service, reactive power and reserve services. 
  12. Electricity Systems Operator Internal Allowances – Internal costs (allowed revenue) are calculated in the Price Control Financial Model.
  13. Balancing Use of Systems Energy Trading Costs – these are costs for trading done with generators outside of the balancing mechanism e.g. forward trading via bilateral agreements.
  14. Line Losses – the amount of energy lost while transmitting electricity around the network.

[3] Electricity North West, National Grid Electricity Distribution and UK Power Networks are the worst offenders. These three companies taken together have a combined underspend of more than £1.1bn.

The reason this is more than the 933m total is that some DNOs – especially Scottish Power Networks – have overspent. Scottish Power Energy Networks (operates MANWEB and South Scotland) does have some of the highest standing charges in the UK. 

DNO allowance and expenditure cumulative 2015-16 to 2021-22:

DNO Operator (sharing rate) DNO Region Allowance Expenditure Difference
£m £m £m %
Electricity North West (58%) North West          2,085         1,917 -168 -8%
Northern Power Grid (56%) North East          1,472         1,515     43 3%
Yorkshire         1,953         1,921 -32 -2%
National Grid Electricity Distribution (70%) Midlands         2,318         2,329       11 0%
East Midlands         2,346         2,312 -34 -1%
South Wales         1,228         1,163 -65 -5%
South West         1,890         1,831 -59 -3%
UK Power Networks (53%) London         2,007         1,741 -267 -13%
South East         1,941         1,657 -284 -15%
East Anglia         2,889         2,622 -268 -9%
Scottish Power Energy Networks (54%) South Scotland         1,747         1,792       45 3%
MANWEB         1,952         2,037       85 4%
Scottish and Southern Electricity Networks (56%) North Scotland         1,492         1,519       26 2%
Southern         2,635         2,670       34 1%
Total GB       27,957       27,023 -933 -3%

[4] Underspend has generally been in longer term investment in networks i.e. network reinforcement and replacing equipment and totals c.GBP2.5bn. Conversely over-spend has generally been in shorter term operational activities and totals c.GBP1.5bn.

Struggling households need £73 a month off energy bills to keep warm this winter

Data commissioned by the Warm This Winter campaign has revealed how much it would take to enable struggling households to be able to afford their energy bills. [1]

A fifth (21%) said that they need over £100 a month off their energy bills. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

A fifth (21%) said that they need over £100 a month. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

For those in work, the figure is £71 and for those who are not working, it rises to £77 a month.

Furthermore, Ofgem is expected to increase energy bills by 5% from 1 January and predictions from experts show that prices will remain high until March 2025.

Over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

A wide range of health, poverty, housing and environmental organisations and academics have called on the Chancellor, Jeremy Hunt MP, to help families most in need of support through the introduction of an Emergency Energy Tariff and a help to repay scheme for those in energy debt.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 a month from current levels – a saving of around 46%. [2]

Polling suggests 83% of the general public – who have an opinion would support such a measure [3].

A spokesperson for the End Fuel Poverty Coalition, commented:

“If the UK Government thinks that people will be able to get through this winter without more support for their energy bills, then they are living in cloud cuckoo land. 

“We need to see the Chancellor introduce an Emergency Energy Tariff for vulnerable households and a Help To Repay scheme for those in energy debt.

“Even in winter 2024/25, energy bills will be 79% higher than winter 2020/21. Record prices are here to stay and the UK Government needs to take action to help people stay warm this winter and every winter through increased support for insulation and renewables.

“Failure to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.”

Fi Waters, spokesperson for the Warm This Winter campaign, said:

“The Government is now running dangerously out of time to help people who are most at risk of the health complications of living in cold damp homes.

“People want to see bills come down permanently, which is going to require further government action.

“We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

ENDS

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative.

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

UK population NET: Working NET: Not working
Base: All answering who would need to cut down essential spending, or couldn’t afford their bill even with essential cuts, or said they were unsure if their bill would be affordable (Weighted) 1339 845 493
[113] £101 or more 21% 17% 28%
281 141 140
[88] £76-£100 17% 18% 13%
222 156 66
[63] £51-£75 20% 24% 14%
269 199 70
[38] £26-£50 14% 15% 13%
191 127 64
[13] £1-£25 2% 3% 2%
32 23 9
[0] I do not need bills to come down in order to stay warm this winter 3% 3% 4%
45 23 22
Don’t know 22% 21% 25%
300 176 124
Average 73.0 70.7 77.2

[2] The full copy of the letter is available online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf 

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

Call for Emergency Energy Tariff as vulnerable households fear the winter

Over half of people from vulnerable households (56%) are worried about being cold this winter, according to new data from Opinium, commissioned by the Warm This Winter campaign. [1]

The figure rises to 63% among people living in a household where someone is suffering from a pre-existing health condition or is disabled.

Meanwhile, over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

Three quarters (76%) of people living in households with young children will be putting in place measures to keep warm this winter, with almost a quarter (23%) saying the family will be going to bed early to keep warm. 

For people from households where there is an expectant mother, almost nine in ten (88%) are taking cost saving measures, with over a third (35%) of pregnant mothers or their partners saying that they will spend more time in public heated places (for example a library, community centre or warm space).

The energy bills crisis is now predicted to be so severe that a wide range of health, poverty, housing and environmental organisations and academics have written to Chancellor, Jeremy Hunt MP, to request the introduction of an Emergency Energy Tariff.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 from current levels – a saving of around 46%. [2]

SUPPORT THIS IDEA?

CLICK HERE TO Sign the petition

The coordinator of the End Fuel Poverty Coalition, which is part of the campaign to introduce the Tariff, commented:

“The reality of this winter is that, without support, we will be a nation sheltering in warm spaces, cowering in one room of our homes or wrapped up inside like the michelin man. This should not be acceptable in a modern society. 

“Failure by the Government to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.

“The proposed Emergency Energy Tariff is a specific, targeted, time limited and practically possible intervention which the Chancellor can make to send direct help to households who are most at risk of living in cold damp homes. 

“The Government should meet with charities and industry to finalise the details of the proposal. It can then use the opportunity of the Autumn Statement to send a clear message to the public that Ministers understand their suffering and are prepared to help them stay warm this winter.”

Polling suggests that 83% of the public who have an opinion would support such a measure – with support consistently high among all demographic groups and all parts of the UK [3].

The research also suggests that, among those who will have to cut back on essentials to afford their energy bills or can’t afford them, the plans for an Emergency Energy Tariff would provide them with enough financial support to enable them to avoid the worst of the winter crisis. [4] 

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the research, commented:

“As millions of households batten down the hatches and prepare for a miserable winter in cold damp homes, only the Government can now prevent a winter crisis.

“As well as this emergency tariff for those now priced out of the market, people want to see bills come down permanently, which is going to require government action. We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

Jan Shortt, General Secretary of the National Pensioners Convention:

“Government financial support for this winter is absolutely crucial to older and vulnerable people. A longer term effective policy of addressing fuel poverty must contain genuine and active moves to sustainable, renewable and affordable energy.”

The Chancellor has also recently been urged to use the Autumn Statement to tackle record levels of existing energy debt through a Help To Repay scheme, which would be in addition to support for tariffs to prevent debt levels escalating further.

Researchers examined the make-up of groups who think they will or could be  unable to afford to turn the heating on this winter and found little difference between groups who work or do not work and found that 27% of people who are not on benefits can’t or may not be able to afford to heat their home. However, with 50% of benefit recipients saying they will not or may not be able to afford to turn their heating on, campaigners have also called for the Government to upweight pensions and benefits in line with inflation and remove punitive measures such as the two-child benefits cap.

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

Dr Jason Palmer, Cambridge Architectural Research:

“Financial support for households struggling with fuel poverty is critical this winter, and only with government help will the most vulnerable people stay out of hospital and avoid anxiety from going into debt. This support should run in parallel with much greater investment in energy efficiency to address fuel poverty and bring down carbon emissions from homes.”

Dr Tina Fawcett, Associate Professor, University of Oxford:

“Our research has helped identify how to effectively target vital support to households most at risk this winter. To avoid future energy bill crises, locally we need more investment in energy efficiency and energy advice, and nationally we must rapidly reduce our dependence on fossil fuels.”

Rachael Williamson, Head of Policy and External Affairs, Chartered Institute of Housing:

“Our members see first hand the impact that high energy prices are having on some of the most vulnerable. Even before the recent rapid increase in gas and electricity prices, approximately 4.5 million UK households were living in fuel poverty. An emergency energy tariff would help provide targeted support for those most at risk this winter. This should be coupled with a longer-term strategy to develop a social tariff, boost energy efficiency and tackle energy debt so we can reduce fuel poverty and carbon emissions.”

Alex Massey, Head of Policy, Public Affairs and Campaigns, MND Association

“People living with MND have been hardest hit by the energy crisis. Many rely on a wide range of personal powered equipment at home to maintain life, health and wellbeing. Consequently, soaring energy costs have placed many households in an impossible financial position. Targeted government investment is now essential to prevent people living with MND being forced to choose between which vital piece of medical equipment to switch off this winter.”

ENDS

Notes to Editors

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative. 

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

[2] Read the pdf of the letter online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

[4] On average, researchers found that these groups felt they needed £73 off their monthly bill this winter to make it affordable to heat their homes to a comfortable level. The proposed Emergency Energy Tariff would provide approximately £87 off the bills.

People unable to clear energy debts as calls for Help to Repay scheme increase

One in four people with energy debts (24%) are currently unable to repay, according to new research commissioned by National Debtline.

The debt advice service is leading a coalition of 13 organisations calling on the Chancellor to introduce a ‘Help To Repay’ scheme in the Autumn Statement.

The findings, based on UK-wide research commissioned from Opinium, show that an estimated 6.4 million UK adults (12%) are behind on their energy bills heading into this winter – an increase of more than 824,000 since April.

More than one in five people (22%) say they have cut back on food and other essentials in order to keep up with energy bills (an estimated 11.6 million people). Two thirds (66%) say they will reduce how much they use the heating this winter.

Meanwhile millions of people have sold personal possessions (9%, 4.7 million), used their overdraft (7%, 4 million) and turned to high-cost credit (4%) in an effort to stay on top of rising energy costs.

The research also reveals the difficulties facing people falling behind in resolving their situation. Of those currently behind with their energy bill, 21% said their supplier had not accepted an affordable offer of repayment – and 18% had been unable to get through to their supplier when they tried to contact them to discuss the debt.

One in four (24%) say they are regularly losing sleep worrying about their energy debt.

The findings come as energy debt hit its highest-ever level of £2.6 billion, according to the energy regulator Ofgem.

A coalition of 13 organisations led by National Debtline and including National Energy Action, Scope and the End Fuel Poverty Coalition, have written to the Chancellor, Jeremy Hunt, urging him to introduce a ‘Help to Repay’ scheme to provide repayment matching and debt relief for unaffordable arrears.

Separate National Debtline research shows that almost three quarters of UK adults (73%) think people who have fallen into energy debt due to high prices should be given help to reduce what they owe.

David Cheadle, acting chief executive of the Money Advice Trust, the charity
that runs National Debtline, said:
“High energy costs have left millions trapped in energy debt – and these
households urgently need support this winter. The Government now has only a limited window of opportunity to act, which is why we are calling on the Chancellor to use the Autumn Statement to step in with the help people need.

“Our Help to Repay proposal would help bring down the record £2.6 billion energy debt in the market – and offer a lifeline to people whose incomes simply will not stretch to pay off their energy arrears. It would also have the support of the general public – with 73% backing this kind of government help.

“National Debtline advisers hear every day of the toll that energy debts are taking on people’s lives and health, and the urgency of the situation cannot be underestimated. Crucially, no one needs to go through this alone. I would urge anyone struggling to cope with their energy bills to seek free, independent debt advice as soon as possible.”

Matt Copeland, head of policy and public affairs at National Energy Action, said:
“Debt levels in the energy market are at an all-time high after years of unaffordable prices. And monthly energy bills for many will be higher this winter than the last. The impact that this has on low-income households is
profound. One-third of British adults say they will struggle to pay their energy bills this winter.

“Ofgem’s proposal to raise the price cap as a way of dealing with the increased debt only exacerbates the problem. Failure to provide support to reduce energy bills and energy debt would be catastrophic, leaving millions of households unable to stay warm and healthy this winter.

“A ‘Help to Repay’ scheme would accelerate debt payments, ease the burden on household budgets, and help create a more sustainable energy market.”

James Taylor, executive director of strategy at disability equality charity Scope, said:
“Winter hasn’t hit yet and already Scope’s energy helpline is being inundated with calls from disabled people facing eye-watering amounts of debt. On average, our customers have almost £1,800 worth of energy debt – more than double this time last year. That’s despite cutting back everything they can.

“Life costs a lot more for disabled people, who need more energy to power wheelchairs and breathing equipment, or have the heating on more for their health. The government must defuse this debt timebomb, bring in emergency support for this winter, and keep its promise to consider an energy social tariff which would end sky-high bills for disabled people.”

This month Ofgem announced plans to increase energy bills by £17 per household to reduce the risk of energy firms going bust or leaving the market – a decision that Fiona Waters a spokesperson for the Warm This Winter campaign called  “appalling.” Waters added:

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants.”

Fixed price tariffs could trap customers on higher bills

The second Warm This Winter Tariff Watch report has revealed that the energy market has 337 fixed price tariffs that are more expensive than the current Ofgem price cap. 206 tariffs will still be more expensive than the predicted January price cap.

Consumers on these tariffs will be paying a penalty for having fixed their energy bills and with an average exit fee of £138, many households could feel trapped into remaining on tariffs which now represent a bad deal.

The report also reveals an unwelcome league table of the exit fees some energy firms charge for leaving a tariff early. [1]

Just one in twenty (6%) British Gas tariffs come with no exit fees – and the firm’s average exit fee is £62. Among the other main suppliers, 12% of EONs tariffs have no exit fees, 14% of EDF and 15% of Ovo’s tariffs are free of exit fees.  Ecotricity, Utility Warehouse, So Energy also had small proportions of their tariffs with zero exit fees.

On the other hand, almost all tariffs for Good Energy, Octopus and Cooperative Energy come with no exit fees. However, one smaller supplier, Ecotricity, charges the highest exit fees, averaging £150.

As unit costs have come down in recent months, but are expected to increase again in January 2024, the report reveals that customers could save money over the next 12 months if offered a “one year fixed” tariff with unit rates and standing charges below the current price cap. [2]

These rates for a direct debit customer are as the below:

  • Standing Charges: Electric 53 p/day, Gas 30 p/day
  • Unit Rates: Electric 27 p/kWh, Gas 7 p/kWh

However, the analysis shows there just ONE dual fuel fixed tariff currently on the market is below these levels. For the best variable deal, the report authors predict that the current best offer could be with two different suppliers.

The report also reveals that energy firms’ operating costs are making up £242 (an average of 13%) of customers’ bills.

In an analysis of firms’ operating costs, the report reveals that energy firms may be spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts (c.11% of operating costs), as they do on operating customer contact centres (c.12% of operating costs).

Operating costs, which go into the standing charges paid by households, also consist of central overheads, such as office rents and the cost of maintaining energy meters.

The report also reveals that suppliers are now expected to make an additional £140m in profit on the nation’s energy bills over the next 12 months, thanks to changes to the Ofgem price cap which came into force on 1 October.

The new rules mean that firms now make an average £64.70 profit per customer per year, up by £4.70 per customer. The projected 12 month profits for all energy suppliers has hit £1.88bn, an increase of £140m from the previous Warm This Winter Tariff Watch report (an 8% increase).

The predictions are in addition to any profits which firms have already made in 2023, which stand at a conservative estimate of over £2bn. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“With energy prices subject to change, customers should exercise extreme caution when thinking about switching and fixing and we would call on companies to waive exit fees so people can switch easily to the cheapest tariff available.

“And while households suffer, the Government sits on its hands and refuses to introduce longer term tariff reforms which could bring down bills and help people stay warm this winter and every winter.

“Indeed, with the Prime Minister recently halting work to improve the energy efficiency of buildings, Britain’s households will be trapped in cold damp homes for years to come.”

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the report, said:

“Energy firms spending £242 per customer on operating costs adds insult to injury for UK households struggling to stay warm this winter. Customers should not be subsidising fancy headquarters, entertaining and marketing when these companies are making billions. That money should be used to end energy debt and lower bills. It’s yet another example of our broken energy system which the government and energy firms seem to be in denial about.”

ENDS

This press release refers to England, Scotland and Wales only. For full details, methodology and sources, read the full report available at: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_2_Final_Oct_2023.pdf

[1] Minimum, maximum and average single fuel exit fees per supplier for fixed tariffs in the last two years.​​

Energy firm Minimum exit fee Maximum exit fee Average exit fee Count of zero exit fee tariffs % with zero exit fees
Ecotricity £100 £200 £150 0 0%
Utility Warehouse £25 £75 £46 0 0%
So Energy £5 £75 £27 0 0%
Shell Energy £30 £75 £44 1 1%
British Gas £30 £100 £62 7 6%
E.ON £25 £30 £29 3 12%
EDF Energy £15 £200 £66 29 14%
OVO Energy £30 £75 £37 30 15%
SSE £30 £75 £40 19 33%
ScottishPower £30 £150 £66 66 40%
Outfox the Market £30 £300 £62 24 47%
Sainsbury’s Energy £30 £30 £30 9 69%
Affect Energy £75 £75 £75 25 93%
Ebico Living £75 £75 £75 33 94%
Co-operative Energy £75 £75 £75 85 98%
Octopus Energy £75 £75 £75 249 99%
Good Energy £0 £0 £0 4 100%

[2] Best tariff prices correct as of 2 October 2023. The energy market is constantly changing and customers should always check for the best deal based on their actual usage. The information on suppliers is solely a reflection on tariff prices and takes no other factors into account (e.g. customer service levels, support for vulnerable households etc). Households should always think before they fix. 

Advice provided in this press release should not be seen as formal financial advice. Energy prices are volatile and subject to significant changes at short notice. Ofgem updates its price cap calculations every quarter. Future Energy Associates advise that households who suspect they may be on overly expensive energy tariffs should explore alternative options on price comparison websites, consult with their energy suppliers, or seek guidance from consumer advocacy groups, such as Citizen’s Advice to determine the most suitable steps for them.

[3] Declared profits from 2023:

Among the firms which also provided energy, but whose supply side profits are harder to quantify EDF, profits lept to £2bn (€2.3 billion) in the first half of 2023. Ofgem is consulting on plans to make profits reporting more transparent.

Winter energy crisis inevitable warn MPs

MPs on the House of Commons Energy Security Committee have warned that another winter energy crisis is “inevitable” without further Government support for households.

The cross-party Committee took evidence from organisations, including the End Fuel Poverty Coalition members, energy firms and regulators. The final report acknowledges that more support for energy bills will be needed this winter.

End Fuel Poverty Coalition members put forward examples of dangerous behaviour that households resorted to in order to try and keep bills down last winter. But despite the Government help for households last winter, almost 5,000 excess winter deaths were caused by living in cold damp homes.

In its final report, the Committee recommended that the energy firms improve the customer service and the empathy shown to households this winter – as well as providing a priority crisis line for charities working with the most vulnerable.

MPs also suggested that the Government must take steps to get 2022 Energy Bills Support Scheme cash to households who missed out, extend the Warm Home Discount and reform cold weather payments. It also recommends radical overhaul of standing charges and the introduction of a social tariff for vulnerable households.

The coordinator of the End Fuel Poverty Coalition was one of the experts called to give evidence to the Committee. They commented:

“This is a welcome report full of practical recommendations that could help avert the looming cold homes crisis this winter.

“We’re disappointed there is nothing specific in the report to help the millions of households in debt to their energy firms and who are running just to stand still with their payments. Frontline charities have recently backed proposals sent to ministers to introduce a “Help to Repay” scheme to tackle the growing mountain of energy debt.

“But the big elephant in the room is if the Government will listen to the eminently sensible suggestions from MPs and take urgent action to keep people warm this winter.”

Recently the End Fuel Poverty Coalition wrote to the new Secretary of State to issue a warning about the risks of the winter ahead and to offer additional suggestions to help tackle fuel poverty in the short and long term.

This week the Coalition, which is part of the Warm This Winter campaign, also joined more than 400 organisations to write to the Prime Minister asking the Government to think again about weakening of net zero policies which could cause lasting damage to the UK economy.

For poverty campaigners, the PM’s decision to rule out increased energy efficiency standards comes with serious implications. New Citizens Advice figures revealed that private renters wasted £1.1bn this year on energy that leaks out of their homes, with this figure now set to continue.

A spokesperson for the End Fuel Poverty Coalition said:

“There is a real-life cost to the PM’s posturing – especially for the millions of households who rent from a private landlord. Many will now face high bills and cold damp homes forever after being abandoned by the Government.

“Last winter, the health problems caused by living in cold homes mounted up. The Prime Minister and Energy Secretary should be focussed on providing help for households to survive this winter and improve their living conditions in the long run.

“We need the Government to double down on support for households, including improving energy efficiency and reforming electricity pricing markets to ensure customers can enjoy the advantages of more affordable renewable electricity.”

Energy bills a voter priority as new Secretary of State appointed

Key swing voters say policies to tackle the cost of living crisis are critical to their voting intentions in the next election, but neither major party has the confidence of voters on the issue.

As a new Secretary of State for Energy Security and Net Zero has been appointed, the report finds that the cost of living crisis is the number two issue determining how people will vote at the next election, with 50% of all voters choosing it as a priority issue, just behind the NHS.

The figures from YouGov on behalf of the Stop the Squeeze campaign reveal that bringing down the cost of energy for households is the number one solution to the crisis people would like to see.

Overall, 58% of voters would like to see policies enacted to bring down the cost of energy bills – by far the most popular option to tackle the cost of living crisis, with cutting VAT the second favourite on 28%. The report authors found that this option performs consistently well among all types of voter demographics and across voters of all parties.

Sam Tims, senior economist at the New Economics Foundation (NEF) said: “Ahead of the next election voters’ priorities are clear: they want politicians to offer up bold solutions to tackle the cost of living crisis. Energy bills, housing costs and wages will be at the forefront of people’s minds.

“There is a golden opportunity for any political party that can offer voters both a short term-plan to support people through the cost of living crisis and the long-term change we need to improve living standards for good.”

The Prime Minister has reshuffled his top team ahead of the next General Election with Claire Coutinho replacing Grant Shapps as Energy Secretary. A spokesperson for the End Fuel Poverty Coalition, commented:

“Claire Coutinho’s inbox is already groaning under the weight of vital decisions which need to be made to reform Britain’s broken energy system.

“Energy bills remain at record levels with every unit of energy costing double what it did in winter 2020/21, with daily standing charges also increasing and customers in record levels of energy debt.

“As well as securing financial support to help people stay warm this winter, the new ministerial team will need to amend the Energy Bill to ban the forced transfer of households onto prepayment meters and improve the energy efficiency of rented properties.

“Previous ministers appeared to abandon plans to consult on tariff reform to help the households most in need and who most rely on energy to keep themselves safe. The new Secretary of State has an opportunity to recommit the Government to a social tariff and make meaningful long term change to people’s energy bills.

“The Secretary of State also needs to speed up reforms to the electricity market to ensure customers quickly enjoy the advantages of more affordable renewable energy, and so that their electricity rates are no longer subject to the unpredictable cost fluctuations of fossil fuels.

“There is also the opportunity for ministers to turn the current crisis into an opportunity to engage households in a large-scale retrofitting programme. They must also look at addressing UK energy security and independence by weaning the UK off its dependence on oil and gas and ending subsidies for fossil fuels, using this money to support a fair transition onto cleaner heat.”

ENDS

Download the full report as a pdf here: https://uploads-ssl.webflow.com/63357e2a3f369bd320e28ebe/64ef655fbbd961fcdb5441cd_The%20Bottom%20Line%20polling%20report%20FINAL.pdf

Call for Help To Repay scheme as energy bills debt soars

An estimated 5.5 million UK adults are now in energy bills debt, according to new research from the Money Advice Trust.

The latest findings confirm the heavy toll that high energy bills are taking on household finances with 2.1 million more people in energy arrears in April 2023 than in March last year and millions struggling to access help from their energy suppliers.

The figures are also more than previous data from the Warm This Winter campaign suggested earlier this year.

In the wake of the research, the End Fuel Poverty Coalition has joined forces with Money Advice Trust, StepChange Debt Charity, Warm This Winter and other organisations to ask the Secretary of State for Energy Security and Net Zero to set up a ‘Help To Repay’ repayment-matching scheme.

Campaigners believe this will provide a safe route out of debt for struggling households.

The Money Advice Trust research finds that millions more households were struggling with their energy costs in April than in March 2022, with support from energy suppliers – which is vital to help them repay arrears – proving difficult to access.

While support is available from energy providers for people who are struggling, an estimated 3.9 million people (7 percent) said they have not been able to access help for their bills after contacting their suppliers for support.

A further 3.2 million people (6 percent) reported not being able to get through and contact their supplier for help when they had tried to do so.

Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:
“Energy bills might finally be falling – but for millions of households, the effects of this cost of living crisis are already baked in. With more people falling behind on energy and other essential bills and millions facing unaffordable demands for repayment, we need urgent action to make sure everyone has access to a safe route out of debt.

“The government has already provided substantial support to help with the cost of living – but no-one should underestimate the scale of this continued crisis.

“The Help To Repay payment-matching scheme we are proposing will help those who otherwise will simply not be able to dig themselves out of the energy arrears that this crisis has created. And for those most in need, the government should introduce an Essentials Guarantee to link the rate of Universal Credit to cover the cost of essential goods like food and energy.”

A spokesperson for the End Fuel Poverty Coalition commented:

“Energy debt is surging to unprecedented levels and it’s clear that households are just unable to cope.

“The majority of this new debt is caused by the record high energy prices which have caused misery for millions, but generated excess profits for the firms involved in Britain’s broken energy system.

“Rather than end the Windfall Tax early, as the Government plans to do, it should instead look at how this could be used to help get those people suffering back on an even keel.

“Not only would this help reduce levels of fuel poverty now and into next winter, but it will also help wider household finances, ensuring people no longer have to cut back on essentials.”

Research by the University of Bristol has found only 26% of households have not had to take measures to cut back on spending and the majority of people are now taking steps to cut costs in one or more areas.

A third (35%) were not able to afford a healthy balanced diet at least once in the past month and one in five of those in serious financial difficulties had not eaten for a whole day at least three times during the last month.

Free, expert advice is available from charity-run services like National Debtline.

Help To Repay logo

Full detail of the Help To Repay proposal submitted to the Government can be read online: https://moneyadvicetrust.org/media/documents/Help_to_Repay_-_Energy_arrears_scheme_proposal.pdf

1.7m households in fuel poverty miss out on Government help

Almost two million households in severe fuel poverty will miss out on government help in 2023/24 according to new figures. [1]

Data produced by researchers at the University of York for Child Poverty Action Group has calculated that among those groups who will miss out are 688,000 fuel poor households with children. [2]

The figures also show that households in London, the North East and the North West are the most likely to miss out on Government help. Over 1m fuel poor owner-occupied households and over 500,000 struggling homes in the private rented sector will be among those who no longer get Government help.

The UK Government introduced new support packages for vulnerable households from 1 April 2023 to replace the Energy Bills Support Scheme and other programmes which ran over winter 2022/23. The new support includes payments of up to £900 for those households on some benefits, with the first instalments due to be paid this week.

Estimates based on Government data have also shown that over four million Energy Bills Support Scheme monthly payments of £66 or £67 from this winter had still to be made to or redeemed by households for the period October 2022 to February 2023. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“Millions of people will be worse off in 2023/24 as energy bills remain high, but support from the Government has fallen in real terms.

“Without further Government support and rapid roll out of energy efficiency programmes, the Dickensian conditions experienced by millions this winter will be replicated again. Until Britain’s broken energy system is reformed, we will continue to see households rely on Government support to help them through the energy bills crisis.”

Professor Jonathan Bradshaw, from the University of York’s Social Policy Research Unit, commented:

“This data answers an important question because it is an indication of the limits of using the receipt of social security benefits to mitigate fuel poverty, and suggests who might be the types of household that need to be targeted in other ways, including by some kind of social tariff.”

The main reason behind households being excluded is the link between cost of living payments and mean-tested benefits. 

Alison Garnham, CEO of Child Poverty Action Group, said: 

“The Government’s one-off cost-of-living payment is welcome, but this data shows it doesn’t go far enough. Flat-rate payments leave families with children, who have higher living costs, short-changed. Increasing child benefit, which lost a quarter of its value in the last decade and goes to lower and middle income households, is the first step to making sure struggling families have enough money to heat their homes.”

Tessa Khan, executive director of Uplift which is part of the Warm This Winter campaign, added: 

“The Government’s rehashed policies on energy efficiency fall miles short of the national programme of insulation and home upgrades that is needed to solve the fuel poverty crisis in the longer term. Ministers also continue to deny communities access to onshore wind, which is among the cheapest energy sources around and a resource we have in abundance. Instead Ministers are handing billions in subsidies to oil and gas developments that won’t lower bills or boost UK energy security, as most of it is oil for export. 

“It is beyond time that this government delivered real policies that address the big issues affecting people’s lives, not least eye-watering energy bills.”

ENDS

[1] PDF available to download: https://cpag.org.uk/sites/default/files/files/policypost/Who_are_the_fuel_poor_revised.pdf. The figures are, if anything, an underestimate of the problem as the definition of fuel poverty used for these calculations is one of the most targeted available.  

[2] 69 per cent of the households missing out are from the bottom three income deciles, 39 per cent are families with children, 59 per cent are living in owned/ mortgaged houses, 66 per cent are income poor.

[3] Calculations and data available from: https://www.endfuelpoverty.org.uk/energy-firms-holding-280m-of-taxpayers-cash-meant-for-customers/. Customers affected should contact their energy firm for advice and information on how to claim these payments.