Page last updated at 10:21 GMT, Wednesday, 21 October 2009 11:21 UK

Fuel poverty 'continues to rise'

Winter brings new fears that some cannot afford energy bills

Up to 4.6 million households in England could be in fuel poverty in 2009, new figures from the Department of Energy and Climate Change show.

The government has vowed to end fuel poverty in England by 2016.

Fuel poverty is defined as those who spend more than 10% of their household income on heating their homes.

The projection comes within data that reveals the number fuel-poor households in the UK rose from 3.5 million in 2006 to four million in 2007.

The data, based on the latest figures for England and Scotland along with extrapolated estimates for Wales and Northern Ireland, suggest that 16% of all UK households were in fuel poverty in 2007.

"The overall effect of price rises since 2004 has far outweighed the impact of increasing incomes and energy efficiency," the report said.

Higher bills

The number of households in fuel poverty in England was up sharply from just 1.2 million in 2004.

UK fuel poverty graph

The government has a target to eradicate fuel poverty in vulnerable households by next year, followed by all homes in England by 2016. A charter to rid Wales of fuel poverty by 2018 is also in place.

Fuel poverty among vulnerable households reached 3.25 million in the UK in 2007 (up from 2.75 million in 2006), of which 2.3 million households were in England (1.9 million in 2006).

A vulnerable household is one that contains the elderly, children or somebody who is disabled or long term sick.

The government's target for England has become tougher following the latest figures which show the number of fuel-poor households rose from 2.4 million in 2006 to 2.8 million in 2007 in England.

These figures came before the big spike in household energy bills in 2008, although they fell back partly at the start of 2009. This has been taken into account in the projected figures for 2009.

The Fuel Poverty Action Group, a government sponsored advisory committee, has previously said that pensioners live in a hefty proportion of fuel-poor households.

Seeking help

Meanwhile, the Citizens Advice Bureau (CAB) has reported a big rise in the number of people seeking help for their growing fuel bills.

No vulnerable customer has been knowingly disconnected from gas or electricity since 2004 even if they were unable to pay their bill
Garry Felgate, Energy Retail Association

The CAB for England and Wales says the number of people coming through its doors between April and September was 46% up on the same period last year.

The CAB said most people it was seeing were poor but in work.

"We are already seeing large increases in the number of people in fuel debt and it is not yet winter," said David Harker, the chief executive of Citizens Advice.

"Recent government increases in Warm Front Grants and Cold Weather Payments will go someway towards helping but information on what help is available, targeted to those who are most vulnerable, must be a prime focus for the government and energy companies," he added.

Safety net

Average fuel bills are now at record levels, mainly because of the surge in wholesale gas prices in the past few years.

A typical household now pays more than £1,000 in combined gas and electricity charges a year and Ofgem has warned that in a worst case scenario energy bills might rise by a further 60% between now and 2016.

The regulator said that the average annual household gas bill went up by 120% from September 2000 (£365) to September 2009 (£804). At the same time the average annual household electricity bill rose up by 48% from £299 to £443.

Garry Felgate, chief executive of the Energy Retail Association, which represents energy supplier, said that the safety net for vulnerable customers had been strengthened.

"No vulnerable customer has been knowingly disconnected from gas or electricity since 2004 even if they were unable to pay their bill," he said.

Energy and Climate Change Minister David Kidney accepted that there was still a "mountain to climb" in dealing with fuel poverty.

He said plans included "energy makeovers" of homes in the poorest neighbourhoods, which could allow householders to save £300 a year on their bills.

A change of tactics was needed help those in fuel poverty, according to an Audit Commission report published on Wednesday.

It said that only 12% of people receiving winter fuel payments - worth up to £400 a year - were classed as being in fuel poverty.

The report said the government's £2.7bn-a-year budget for winter fuel payments might be better spent on lagging, insulating, re-glazing and modernising the homes of pensioners who cannot afford to heat them properly.

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