The real cost of energy price rises

With the Government revealing that an extra one million people have been pushed into fuel poverty, 2008 will be remembered as the year when serious concerns were raised about the ongoing affordability of household energy. Fuel poverty - where 10% or more of net income is spent on energy - has rocketed to 5.4 million, which means 21% of households are now impacted. Its net also seems to be spreading wider. Although traditionally thought to be a ‘pensioner issue', new research from uSwitch.com shows that fuel poverty is now affecting other social groups too.

The study, which cross compared type of household with net monthly income and average monthly energy spend, found that while almost a third (30%) of pensioner households are in fuel poverty, so are 20% of families with one income and 17% of single person working households. Both groups are vulnerable because punishing price hikes are being met by one person's income alone.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Today's figures have further highlighted the struggle that many people face when paying their fuel bills. 2008 is set to be remembered as the year Britain was crippled by inflation, soaring fuel bills and the rampant growth of fuel poverty. Government failure to stamp out fuel poverty has not only allowed it to tighten its grip on our pensioner population, but spread its roots into other parts of society too. Now single income households, including families, face a real threat to their standard of living as fuel poverty becomes part of everyday British life.

"We cannot underestimate the impact that higher household energy prices will have on consumers - for many it will involve a complete shift in attitude and behaviour. People need to adjust quickly and there are two key steps to this - making sure we pay the lowest possible price for our energy and learning to use less of it."