Financial News

  • 18 December 2012, 8:43

Fuel Poverty Warning For 300,000 More Homes

A further 300,000 people will be pushed into fuel poverty by Christmas because of the latest round of energy price hikes, an advisory body has warned.

The Fuel Poverty Advisory Group (FPAG) said the latest round of energy price rises has increased the average annual energy bill by 7%, taking it to 1,247 for direct debit customers and 1,336 for cash and cheque customers.

These increases are likely to have pushed a further 300,000 households into fuel poverty and estimates have already shown that over nine million households could be living in fuel poverty by 2016.

The FPAG urged David Cameron to take stronger action to ensure there is a more widespread and ambitious effort to tackle "spiralling" fuel poverty levels.

It said the Government should create a cross-departmental group on fuel poverty to ensure a joined-up approach as well as creating a new duty for local authorities to meet fuel poverty targets.

It also advised the Government to carry out an urgent impact assessment of welfare reforms on fuel poverty.

FPAG chairman Derek Lickorish said: "With a cold winter, welfare reforms cutting incomes, and all at a time of austerity measures and other rising household costs, the plight of the fuel poor has never been more serious.

"Millions are living in misery due to high energy bills. Yet time is running out for the Government to fuel poverty-proof the homes of those on the lowest incomes.

"A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky rocket without radical action."

Families are considered to be in fuel poverty when they have to spend more than 10% of their incomes on keeping their homes warm.

The FPAG said that nearly half of the UK's fuel poor households are pensioners, a third contain people with some sort of disability or illness, a fifth contain a child aged five or under and one in 10 house someone aged 75 or over.

The Government recently announced proposals to require energy firms to provide just four tariffs for each fuel and to place all customers on the cheapest price available for their chosen tariff.

But critics have warned that the plans could see an end to cheap deals, stop consumers switching suppliers, reduce competition and push up bills in the long run.

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