Will it be another deadly winter for those in fuel poverty?

For vulnerable households, debt and poverty can leave families unable to heat their homes. Nadine Buddoo looks at what energy suppliers are doing to help those most in need survive the winter.

As nights draw in and temperatures plummet, for many households across the UK the start of the winter period brings with it some very difficult decisions. The “heat or eat” dilemma represents a devastating choice for vulnerable customers, and with a series of rising energy prices across the market it is likely that this winter will see many households forced to make this tough decision. While various schemes and initiatives are being rolled out to help bridge the fuel poverty gap, are energy suppliers really doing enough to ensure they are protecting their vulnerable customers?

Last month (November), the Committee on Fuel Poverty released its latest annual report, which said overall progress on tackling fuel poor households is “stalling”. The committee, established by the Department for Business, Energy and Industrial Strategy (BEIS), is tasked with monitoring the government’s progress on its 2015 fuel poverty strategy.

The fuel poverty strategy includes a statutory fuel poverty target for “as many fuel poor households as reasonably practicable to achieve a minimum energy efficiency rating of a band C by 2030”. It also has two interim milestones of band E by 2020 and band D by 2025. This phased approach follows the principle of prioritising assistance to those in the deepest levels of fuel poverty – “worst first”.

The committee estimates that £17.1 billion of funding will be needed to implement the fuel poverty strategy compared with the £15.4 billion estimate in its 2017 annual report (see table). But as well as an increase in funding, the report also recommends better targeting on energy bill subsidies for low income and pensioner customers – such as the winter fuel payment (WFP) and Warm Home Discount schemes – to help those most at risk with their fuel costs.

It is evident that failing to address these issues could have fatal consequences for some vulnerable customers. Recent figures from the Office for National Statistics (ONS) outline a worrying spike in excess winter deaths during winter 2017/18, reaching the highest level in more than four decades.

The provisional statistics for England and Wales estimate that there were more than 50,000 excess winter deaths during the period, up 45 per cent on the previous year’s total. “Peaks like these are not unusual,” says Nick Stripe, head of health analysis and life events at the ONS. “We have seen more than eight peaks during the last 40 years.

“It is likely that last winter’s increase was due to the predominant strain of flu, the effectiveness of the influenza vaccine and below-average winter temperatures.”

Preventable deaths

However, responding to the report, National Energy Action (NEA) chief executive Adam Scorer labelled the figures “predictable, preventable and shameful”, noting that more than 15,000 of these deaths could be directly related to fuel poverty.

Charity Age UK also has raised concerns over the potentially fatal combination of ill health, poor housing and high energy prices.

“Last winter there were nearly 46,000 excess winter deaths among people aged 65 and over – a shocking 92 per cent of all excess deaths – equating to 379 older people a day. These distressing figures are now the highest we’ve seen in over 40 years,” says Age UK charity director Caroline Abrahams.

“A toxic cocktail of poor housing, high energy prices and ill health can make winter a dangerous time for many older people, and tragically it is the oldest and those who are the most vulnerable who particularly suffer the consequences.”

With recent research from comparethemarket.com warning that 93,000 households in the UK could face a £200 increase in energy bills this winter, those affected are urged to change supplier to avoid being automatically switched to default tariffs during the last quarter of the year. But while energy switching is expected to reach record levels this year, there are still millions of customers who do not switch. So, what are energy suppliers doing to ensure these customers, often the most vulnerable, are not paying over the odds for their energy? And with the big six all coming under fire for announcing price hikes this year, are the sector’s biggest players doing enough to protect customers?

Supplying energy to millions of homes across the country, British Gas has worked with NEA for more than 30 years in a bid to tackle fuel poverty. A company spokesperson insists: “We understand that affordability is an issue for our vulnerable customers.

“Over the last five years [2013-17] we have spent more than £1.3 billion helping customers in need, including voluntary and mandatory contributions.

“Last winter we met our government obligation for the Warm Home Discount scheme. We gave more than 290,000 families and 350,000 pensioners £140 to help pay winter bills.”

In addition to these energy subsidies, the company has funded the British Gas Energy Trust since 2004. The trust helps clear energy debts for customers who are struggling and pays for new energy-efficient appliances. It has provided more than £100 million-worth of support to people in fuel poverty regardless of which energy supplier they are with.

Similarly, energy supplier Eon says it has provided funding to more than 270,000 of its 4.3 million UK customers this year through the Warm Home Discount scheme. The company has fitted 700 new energy efficient boilers free of charge. “We continue to do our best to identify and help our most vulnerable customers throughout the year,” says an Eon spokesperson.

“We also offer support through the Affordable Warmth scheme, which includes energy efficiency advice to ensure our customers understand what they can do to manage their energy use effectively, which can then lead to a referral for energy efficiency measures such as loft insulation and cavity wall insulation through our commitment to Energy Company Obligation (Eco).”

The debt burden

While long-term energy efficiency measures are key, this fails to provide an immediate solution for customers who have accrued and are struggling to pay mounting energy debts. With this in mind, supplier Npower says it offers a variety of support to help customers in energy debt, tailored to their specific needs and circumstances.

Matthew Cole, head of policy and social energy at Npower, says: “For those who fall into arrears on their account, we have a number of payment options. These can include setting up repayment plans over a longer period of time, making repayment arrangements through a prepayment meter or by taking payments direct from their benefits.”

The company’s Energy Fund provides tailored support to customers struggling with energy debt. With support from the fund, customers are also encouraged to regain control of their overall finances and become financially stable so they are able to pay future bills. Grants are awarded to help clear energy debt for customers who can commit to making regular payments over a three-month period for their ongoing energy use.

Over the past year, Npower has helped around 2,000 customers with debt relief through the Energy Fund, totalling around £2 million. Cole adds: “Beyond meeting the immediate need of supporting the customer out of debt, the scheme works to help change behaviour – around 75 per cent of customers remain debt free after 12 months.

“We have also established partnerships with money advice charities, including Money Advice Trust, Christians Against Poverty and Step Change, to provide expert advice and support as we recognise that sometimes people need really tailored, specialist and holistic support.”

SSE also works with organisations like debt charity Step Change to provide support for customers who find themselves in financial difficulty. According to a spokesperson: “SSE takes its responsibility towards its customers very seriously, especially for the vulnerable, and has a strong track record of going above and beyond to meet customers’ needs.”

Earlier this year the company received accreditation from the British Standards Institute for its inclusive service provision. The spokesperson adds: “This means SSE has the systems in place to identify vulnerability, no matter what form it takes, and the flexibility to adapt its service to suit a customer’s individual needs.”

It is this holistic and tailored approach that is championed by charities like the Money Advice Trust. Its A Decade in Debt report, published in September, looked at how the nation’s debt landscape has changed over the past ten years.

“Debt problems in the UK are not only changing, but growing,” comments Joanna Elson, chief executive at Money Advice Trust. “The number of people contacting advice agencies such as National Debtline is increasing significantly – with 2018 expected to see the highest number of calls to National Debtline since 2013.

“Given these trends, it has never been more important to understand the complexities of the debt problems people are facing – and develop responses in policy and practice to address them.”

The charity’s recommendations for significantly reducing the UK’s energy arrears includes a call to action for suppliers to implement a multi-channel approach and work more closely with the debt advice sector to really help customers tackle debt.

While many suppliers have taken encouraging steps towards reducing energy debt and protecting vulnerable customers, there is clearly more work to be done. Delivering more diverse and tailored solutions to help address fuel poverty will require full buy-in from energy suppliers, government, regulators, the advice sector and customers themselves. This will be fundamental to ensuring that in a year’s time the industry is not reflecting on worsening numbers of excessive winter deaths attributed to cold homes.

The wider context

The Committee on Fuel Poverty insists that delivering the UK’s fuel poverty strategy must be seen in a broader context than purely cold homes and high fuel bills. The committee is advising government to also consider the impact on:

• • Health. Cold homes negatively impact physical and mental health, costing the NHS and local councils. It also contributes towards excess winter deaths.
• • Carbon. Achieving the 2030 Band C target would be a cost-effective way of helping to cut emissions.
• • Jobs. Installing the necessary energy efficiency ­measures would create jobs across the country.