Government Redefines Fuel Poverty

9 July 2013

The Government has adjusted the definition of fuel poverty to better reflect the current economic climate.

Following advice from an independent review and consultation, the Department of Energy and Climate Change (DECC) has changed the definition of fuel poverty to ensure that it better targets those that require assistance with their fuel bills.

Under the new definition, a household is determined to be in fuel poverty if its:

  • Total income is below the poverty line (taking into account energy costs)
  • Energy costs are higher than typical

The poverty line is considered to be 60% of the median income.

The change in definition relates only to England.

The change in definition will affect both the Green Deal and Energy Company Obligation (ECO) schemes set up by the Government to aid households to make energy efficient home improvements.

Under the Green Deal, households can apply for a loan to pay for energy saving measures such as Cavity Wall Insulation and Loft Insulation. A number of non-repayable grants are also available for households considered to be living in fuel poverty.

Cavity Wall Insulation and Loft Insulation are also available via the ECO, which focuses on installing such measures for those living in fuel poverty and those with hard to fix properties.

“I am determined to tackle the scourge of fuel poverty and help hard-pressed consumers across the country,” said Edward Davey, Secretary of State for Energy and Climate Change.

“In the past, action to tackle fuel poverty has been held back by how the problem has been defined. This made it difficult to deliver help to the people who need it most.

“The new definition, together with the amendment that we are making to the Energy Bill, will ensure a focus on the households that are at the heart of the fuel poverty problem. That’s those with both low incomes and high energy costs.”

Almost 40,000 Green Deal assessments had been carried out up to June 15, while 81,798 energy saving measures had been installed as a part of the ECO. 89% of that figure related to Cavity Wall Insulation and Loft Insulation.

“We are doing all we can to help hardworking families and vulnerable people with the rising cost of living,” Greg Barker, Minister for Energy and Climate Change, added.

“Despite the recent modest fall in the numbers of households in fuel poverty, there is still an unacceptably high number of people living in cold, damp, unhealthy conditions. That’s why we must take a new approach to fuel poverty, with energy efficiency at the heart.

“I am determined that we use new schemes like the Energy Company Obligation to target those who need support the most, and that’s what our new approach to fuel poverty will help to achieve.”

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