Define: Fuel Poverty

Fuel poverty refers to a situation in which households struggle to afford the energy needed to adequately heat their homes and meet other basic energy needs. It typically occurs when a household’s income is insufficient to cover the costs of heating and powering their home, leading to difficulties in maintaining a comfortable and healthy living environment. Fuel poverty can result from various factors, including low incomes, high energy prices, inefficient housing, and extreme weather conditions. It poses significant health and social risks, as inadequate heating can lead to cold-related illnesses, respiratory problems, and stress. Governments and organisations often implement measures to address fuel poverty, such as energy assistance programs, subsidies, energy efficiency improvements, and education initiatives aimed at reducing energy consumption and costs for vulnerable households.

A household in Fuel Poverty is usually defined as one that needs to spend 10% or more of net income on fuel costs.

This can mean that a choice has to be made between adequate heating and other necessities such as food or paying other bills.

It was traditionally the elderly who were most affected by fuel poverty, but much progress has been by both charities and the government to alleviate the problem for most pensioners, through initiatives such as winter fuel payments and assistance with home insulation.

Fuel poverty is now in the increase again, say charities, because of record energy price increases over the last few years, caused by high wholesale energy prices.

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This glossary post was last updated: 29th March, 2024.