Fire Safety

The UK energy price cap: Its impact on fuel poverty and fire risk

Here, we explore the consequences of the UK government's most recent energy price cap.

The UK government’s most recent energy price cap, taking effect from 1st January, has caused widespread concern amongst households already struggling to make ends meet.

In this blog, we will explore the impact of this energy price cap, discussing how it will contribute to the growing number of ‘fuel poor’ households and the side effects of increasing fuel poverty and fire risk in our communities.

The impact of the price cap on fuel poverty

Fuel poverty and fire risk

Energy regulator Ofgem said the typical annual household bill would go up in January 2024 from £1,834 to £1,928, a rise of £94 or 5%.

Analysts have predicted prices will fall back in March 2024, however new polling by National Energy Action with YouGov reveals that 26% of UK adults say they have struggled to afford to pay their energy bills over the last three months. That’s equivalent to 11 million people.

Ofgem said the rise in bills would be “worrying” at a difficult time for many people, but was the result of higher wholesale costs faced by suppliers, with CEO Jonathan Brearley saying the regulator had told suppliers “we expect them to identify and offer help to those who are struggling with bills.”

Combined with the cost-of-living crisis and the Autumn Statement, the UK’s fuel poverty charity National Energy Action (NEA), said “it will mean millions will struggle in cold and unsafe homes.

When is a household classed as ‘fuel poor’?

UK legislation defines living in fuel poverty as “a member of a household living on a lower income in a home which cannot be kept warm at reasonable cost.”  However, across the different nations, there are varying ways to measure how many households fit this definition and measure progress.

England: Low Income, Low Energy Efficiency (LILEE)

Those households that have an income below the poverty line, living in a home with an Energy Performance Certificate (EPC) of worse than C are considered as being fuel poor.

Wales, Scotland & NI: Different variations of the ‘10%’ metric

Households spending more than 10% of their income after housing costs are considered as being fuel poor. 

Latest fuel poverty statistics in England 

Fuel poverty and fire risk

Households spending more than 10% of their income after housing costs are considered as being fuel poor.

In February 2023, the UK Government released fuel poverty statistics covering 2020-21 in England – before the recent increase in energy prices.

In 2022, there were an estimated 13.4% of households (3.26 million) in fuel poverty in England under the LILEE metric, up from 13.1% in 2021 (3.16 million).

In 2023, it’s projected that this has increased significantly with the average fuel poverty gap (the reduction in required fuel bill that the average fuel poor household needs to not be classed as fuel poor) rising by 31%.

The latest figures also reveal that location and property type has a significant impact on the likelihood of experiencing fuel poverty. West Midlands had the highest proportion of fuel poor households (19.2%) with the lowest proportion found in the South East (8.6%).

Meanwhile homeowners have the least likelihood of being fuel poor (8.8%), although they have the largest average fuel poverty gap at £384, whereas those in privately rented accommodation are most likely to be fuel poor (24.1%). Social housing residents have the lowest average fuel poverty gap at £184 with 17.4% of tenants living fuel poor.

Fuel poverty and fire risk correlation

According to NEA, the UK Government has made limited progress towards the legally binding Fuel Poverty Target for England. This target aims to ensure that all fuel poor households reach an EPC rating of C by the end of 2030. However, the current pace of change means it will take decades to meet this target.

It’s been two years since the energy crisis first began and from 1st October 2023, approximately 6.3 million UK households are in fuel poverty, a figure likely to increase as average annual energy bills rise. Without Government intervention in the form of energy efficiency measures and financial support with bills, more households will fall into fuel poverty.

However, the impact of rising energy bills is not just on fuel poverty, as many local Fire & Rescue Services have reported an increase in incidents of people turning to dangerous alternatives to keep warm or cook food. This puts communities at greater risk of fires, making the role of fire and rescue services in supporting vulnerable households to prevent fires more crucial than ever.

Preventing potential fires in our community

Fuel poverty and fire risk

FireAngel’s patented AI-tool Predict® is the only tool available that can identify high-risk behaviours behind closed doors, providing housing teams with the opportunity to stage interventions and reduce the probability of a future fire occurring.

The patented tool has been in development since 2010 and is built as standard into FireAngel’s Connected smoke and heat alarms, which when installed into properties and connected to the cloud via a gateway will provide ongoing risk mapping unique to all properties.

With millions of households taking drastic measures to cope with fuel poverty and rising energy bills, there has never been more pressure on housing providers to go above and beyond to protect their residents.

FireAngel Predict® enables this enhanced protection and reinforces existing strategies with a level of fire safety never before seen in social housing. Find out more information about this tool or read further details on the recent energy price cap.