Dramatic widening in fuel poverty gap revealed

The average fuel poverty gap for low-income households looks set to have soared by nearly 75% during the past two years, according to new projections by the government’s statutory adviser on the issue.

The fuel poverty gap – the reduction in fuel costs needed for a household to not be in fuel poverty – is projected to be £443 per annum this year. That is 31% higher than the projection of £338 for 2022 and 73% higher than 2021’s out-turn figure of £254.

The latest annual report of the Committee on Fuel Poverty (CfP), which has been published today (Tuesday 28 February), says the proportion of fuel poor households in England is due to increase from 13.4% to 14.4% this year.

This marks the first increase in the level of fuel poverty since 2010 when the proportion was 22.1%. It says the number of fuel poor households has increased from 3.16m in 2021, the last year for which out-turn figures are available, to a projected 3.53m in 2023.

The increase in the fuel poverty gap has been mainly attributed to projected higher energy prices of an estimated 50% for gas and around 36% for electricity in 2023, according to the CfP.

The £443 estimate is based on the assumption that bills will remain for the rest of the year at the increased £3,000 level of the Energy Price Guarantee, which is due to come into force in April.

The aggregate fuel poverty gap is due to nearly double from £804m in 2021 to £1.56n, according to the CfP’s analysis.

The report adds that the average fuel poverty gap would only fall to £432 if the lower projections in the Treasury’s most recent Green Book are used, according to the CfP.

However, the report adds that without the government’s packages of domestic energy support over the past year, an additional 350,000 households would have been in fuel poverty in 2022.

The report also shows that no progress has been made in making low-income households more energy efficient. The report shows that the share of low-income households living in homes with an energy performance certificate rating of Band C is projected to have barely changed over the last two years from 2021’s outturn figure of 53.3% to 53.5% in 2023.

Ways of tackling fuel poverty will be discussed at Utility Week’s Customer Summit on 21 and 22 March in Birmingham. Find our more here.