New analysis by consultants LCP of detailed data on household spending patterns suggests that many elderly widows and those on pension credit were already at high risk of living in fuel poverty even before the surge in energy bills in recent years.  Even if the government comes up with additional help to cover increased bills, these vulnerable elderly households will remain ‘fuel poor’.

The most recent detailed data on household spending which was not affected by the impact of Lockdown covers the financial year 2019/20 and comes from the ONS Living Costs and Food Survey.  In that year, spending on gas, electricity and other fuel accounted for just over 6% of total household spending for a typical household.  But, as the table shows, certain groups were already much closer on average to the fuel poverty line:

Source: LCP calculations based on ONS Living Costs and Food Survey

The table shows that even in 2019/20, the typical person on pension credit was already living in fuel poverty, spending more than 10% of their income on energy bills. 

However, for the majority of 2019/20, the dual fuel energy price cap was just £1,179 (based on the rate which applied from August 2019 to February 2020).  The cap today is already £1,971, an increase of 67%, meaning that the typical widowed pensioner (who was already paying 9.5% of her income in energy bills three years ago) will also have been dragged into fuel poverty even before the October 2022 and January 2023 price hikes. 

More than 3.5m elderly and vulnerable people are therefore at risk of long-term fuel poverty even in the event of further government measures to tackle immediate hikes in bills.

Commenting, Steve Webb, partner at LCP said: “Whilst all households are feeling the pain of soaring energy bills, many widows and those on pension credit may have gone into the current crisis already struggling to pay their bills.  Urgent action to tackle the price hikes expected in the coming months is vitally important, but even if bills eventually begin to subside it is vital that the underlying problem of fuel poverty among the elderly is properly addressed.  Measures required include promoting effective take-up of benefits that are already available as well as a major upgrade in the energy efficiency of the homes in question.  Greater supply of suitable housing would also give widows more options to trade down to a more appropriate property without having to move away from the area in which they raised their family”.