UNIVERSITY OF YORK
Social
Policy Research Unit
UPDATE
ON FUEL POVERTY ESTIMATES FOLLOWING GOVERNMENT FUEL CAP OF £2500:
There will (hopefully) be an uprating of benefits
and pensions in April 2023 based on the inflation rate in September. But the
inflation rate in September is likely to be less than the inflation rate in
October and beyond when the government fuel price cap comes into effect.
In October we can now expect fuel poverty to rise
to 38.1% using the 10% threshold. However this takes account of the £400
mitigation which runs out in March 2023. Then in April 62.5% of households
will be in in fuel poverty using the 10% threshold and 27% using the 20%
threshold unless there is some further mitigation.
Table 1: Weekly fuel expenditure, fuel poverty rates and fuel poverty
gaps and numbers of households and individuals in fuel poverty
Table
2 gives the regional breakdown of fuel poverty. By next April if there are no
further mitigations 72% of households in Northern Ireland and 68% of households
in Scotland will be paying more than 10% on fuel compared to 56% in London.
Table 2: Household fuel poverty status estimates (with newly announced gov price cap and after £15.38 rebate) by region
Table 3: Overlap analysis between fuel and
income poverty
Table 4 shows which types of households will be more or less likely to be in fuel poverty in October 2022. The households most likely to be in fuel poverty will be larger families with children and lone-parent families with two or more children.
Table 4: Fuel poverty rates (estimates
based on the new gov price cap for October 2022) by family type
Table 5 shows that energy and food expenditure is going to be taking a third or more of most types of households by next April.
Table 5: Household energy and food
expenditure estimates (based on the new gov energy price cap and food expenses
up by 15%) as a proportion of total expenditure by family type.
[1]
These estimates take account of the £400 reduction that is being paid to
all electricity customers between October 2022 and April 2023 (equivalent to £15.38
a week), but not the other mitigations for means-tested benefit recipients,
pensioners and disabled people which are being paid this year. The estimates
are based on equivalised household net income after housing costs (ie, net
of rent, rates, council tax, water, mortgage interest and other housing regular
payments). The analysis takes no account of any behavioural response to fuel
price increases. It applies estimated gas and electricity price increases to
all domestic fuel consumption including oil and solid fuels. The Living Costs
and Food Survey is based on a national sample of 5,438 households in the UK,
but the breakdowns by region and household type are based on a much smaller
number and although the survey is weighted to represent the population, there
will be quite large sampling errors. Northern Ireland consumers are not covered
by the price cap and are more reliant on oil central heating, which started
rising in price earlier than the gas and electricity price cap.
