Growing Fuel Poverty Forces a Nationwide Price Compare of Gas and Electricity

The government has run a price compare on gas and electricity prices every year for decades. Government agencies appointed to keep watch on prices have reported how prices fluctuate from year to year. Also of interest is the effect that rising prices have on individuals and families.

Like many other financial benchmarks – like the price of food, housing, and other necessities – the government keeps close tabs on gas and electricity prices. Certainly the rising rates have not been lost on anyone, including the UK’s legislators and energy executives. The rising cost of gas and electricity has also not been lost on consumers, especially those consumers struggling to make ends meet with the added challenging of rising energy costs.

In order to keep a close eye on financial benchmarks, financial experts have had to quantify how necessities should play out in the average budget. In other words, financial experts and the government have to assign a number that is acceptable in regard to necessities as well as a number that is not acceptable in regard to necessities. For gas and electricity, that benchmark is 10 percent.

In other words, it is unacceptable for UK consumers to pay more than 10 percent of their household income, or their overall gross earnings, on energy costs. And at greater than 10 percent, an individual or family is considered fuel impoverished.

Current estimates put gas, electricity, and transportation expenses at just about 7 percent of all consumer spending. That equates to roughly £63 billion per year. And, at 7 percent, even the average consumer is in danger of being classified as in fuel poverty. As a matter of fact, nearly one-fourth of all UK households are currently in danger of being classified as in fuel poverty.

The number of households in fuel poverty doubled between the 2004 and 2007. As the nation’s consumers force an overall price compare of gas and electricity prices, nearly one-quarter of them are struggling to pay their gas and electricity bills. And as a result, the government has worked to completely eliminate fuel poverty by investing more than £20 billion in programs designed to do so during the years 2000 to 2008. At an average of £160 million per year, this has been a huge government expenditure.

Yet, if prices continue to increase, £160 million a year may seem tame. The government declared at one point that no household should be in fuel poverty. Backing up that statement may prove quite expensive. Some estimates place the figure for keeping individuals and families warm by funding programs like Winter Fuel Payments, Decent Homes, and Warm Front at somewhere around £4 billion per year and higher.

The numbers on fuel poverty are interesting, and they reflect the trend that gas and electricity prices have taken over the past couple of decades. In 1996, it was estimated that approximately 6.5 million UK households were in fuel poverty. That number fell consistently from that 1996 benchmark until 2006. At its lowest point in 2003 and 2004, fuel poverty was at an estimated low of approximately 2 million households. Fuel poverty rose to an estimated 2.5 million households in 2005, an estimated 3.5 million households in 2006, and an estimated 4 million households in 2007. The figures have continued to rise ever since.

            But there is something that consumers can do. The benchmark that drives the fuel poverty numbers is made up of three factors: household income, energy prices, and energy efficiency. Although there may not be much consumers can do about household income, there are steps that consumers can take to increase energy efficiency and reduce energy prices. These are also the two factors that government programs focus on in their efforts to help consumers eliminate and / or reduce fuel poverty.

Consumers can increase energy efficiency by reducing the amount of energy they use and by using the appliances in a way that increases their efficiency. Government programs foster this idea by helping consumers access energy-efficient lighting and by working with consumers to give them ideas about  how to reduce the amount of energy they use at home. Reducing energy prices may be as simple as running a price compare. Consumers are welcome to switch to a supplier that offers lower rates, thereby reducing their energy bills. The government also helps in this by working with consumers in fuel poverty to help lower their bills through grants and other endowments.

 Sam Jones  the author of this article regularly researches the internet to bring his readers the latest information and advice on fuel poverty and ways in which they can save money, Sam recomends website from


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