Energy price cuts won't scratch the surface of fuel poverty

This year's energy price cuts - averaging out at 4.5% or £60 - will not even scratch the surface of fuel poverty in the UK today, according to uSwitch.com, the independent price comparison and switching service. It calculates that the reductions will only pull 180,000 households out of the fuel poverty trap where 10% or more of net income is spent on energy. This will leave 5.22 million households - 20% of the total number in the UK - still suffering.

Fuel poverty rocketed from 4 million to 5.4 million last year after household energy prices shot up by £380 or 42%. Although traditionally thought to be a ‘pensioner issue', research from uSwitch.com shows that fuel poverty is now affecting other groups in society too - including families with young children.

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.

The group experiencing the lowest levels of fuel poverty are professional couples with no children - here their dual incomes are allowing them to take price hikes in their stride, but still 4% are in fuel poverty. Worryingly, even this group could see fuel poverty levels rocket, fuelled by growing unemployment levels. According to the British Chambers of Commerce, unemployment could hit 3.1 million - impacting around 10% of the workforce - in 2009.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Fuel poverty is a ticking time bomb that energy price cuts alone will not be able to defuse. Average reductions of 4.5% or £60 won't even scratch the surface. This issue is huge, affecting around 2 in 10 households including those with young children, and looks set to snowball out of control because of rising unemployment. If the Government is to stand any chance of getting to grips with fuel poverty it has to take decisive action today.

"Households living with fuel poverty should speak to their energy supplier to find out what help is available - they may qualify for a social tariff. Failing that, all households can help themselves by ensuring they are paying the lowest possible price for their energy and learning to use less of it. Moving to dual fuel, paying by direct debit and signing up to an online plan will lower the price straight away, while simple steps such as using energy efficient light bulbs and not leaving TVs and DVD players on standby will cut down the amount of energy we use."

For more information visit uSwitch.com