Fuel Poverty

Lesson Objectives I will get the opportunity to develop my

understanding of what is fuel poverty.

I will get the opportunity to explain why fuel poverty rates are increasing.

I will be able to explain policies currently offered by the UK Government to end fuel poverty.

What is fuel poverty? The current UK Government’s definition of fuel poverty is when 10% or more of a households income is spent on gas and electricity alone.

This definition is to be replaced by one created at the London School of Economics (LSE). It will be called the Low Income High Cost indicator.

The new definition means a household will be in fuel poverty if costs were above the national average, and if the household were to spend that money, their costs would leave them below the poverty line.

TasksThree factors that influence fuel poverty…

Three groups vulnerable to fuel poverty …………

Write down three factors that influence the level of fuel poverty.

Write down three groups that you think are vulnerable to fuel poverty.

TasksThree factors that influence fuel poverty…

Three groups vulnerable to fuel poverty …………

1. Energy price increases – around 10% this year - over 150% in the last decade.

2. Wages – wages are increasing slower than energy prices i.e. average 1% wage increase compared to 10% energy price increase.

3. Universal Credit – the Centre for Sustainable Energy (CSE) estimates that 75% of the claimants are in fuel poverty.

1. Single parent – it is estimated that over 50% are in fuel poverty.

2. Family with children and one stay at home parent – estimated that just over 40% live in fuel poverty.

3. Pensioners – estimated that 36% of all pensioners are in fuel poverty.

Fuel Poverty 2011

Fuel Poverty Trends In 2004 households spent just over 3% of their income on

gas and electricity – today it is 6%.Current price increases means it is likely to be 10% of

income by 2015. According to the Fuel Poverty Action Group 1% increase

in energy prices forces another 40,000 people into fuel poverty.

The cold can cause serious health problems, for example, heart attacks and strokes can be brought on by the cold.

The cold can kill – according to Age UK there will be 24,000 excess winter deaths this winter.

One country in Europe has a higher rate of fuel poverty – Estonia.

BBC Wales – Pensioners in fuel poverty

Watch the video clip and answer the questions; http://www.bbc.co.uk/news/uk-wales-21190462

1. What does Alfred do to avoid putting the heating on?

2. What other type of poverty does Alfred potentially face?

3. Why are some pensioners going to bed at 6pm?4. What help was given to Gotami to deal with fuel

poverty? 5. Why is fuel poverty particularly important in Wales? 6. What help is available for pensioners in the UK by

energy companies and the government?

Help Available to Pensioners

Winter fuel payment - between £100 to £300 every year if you receive the state pension.

Cold weather payments – this is paid when temperatures are below 0 degrees C for seven days - £25 per seven day period.

Warm home discount - £130 discount given by the energy companies each winter.

Energy grants – to replace heating systems.

Remember this financial help has not increased at the same rate as energy prices i.e. benefits are only increasing 1% annually until 2016.

How would you end fuel poverty?

Working in pairs or a group of three what would do you think the solution is to ending fuel poverty?

The Solutions according

to……David Cameron – investigate the energy market to ensure it is working correctly. Report due in 2014.

Ed Miliband – a price freeze for around 2 years. This would be to “correct” the energy market.

Former PM John Major – a a one off tax on the big six energy companies. Money raised would fund fuel efficient measures e.g. insulating homes, replacing old heating system etc.

Conclusion The Coalition has changed how fuel poverty is

measured but this issue is likely to affect more households.

The elderly are particularly vulnerable due to increased risks of ill health or death.

The Coalition has provided a range of benefits but they are not increasing at the same pace as energy prices.

The issue of energy prices are likely to remain a source of debate in the lead up to the next General Election.