Why is Fuel Poverty Rising in Rural England Post-Pandemic?

It is no secret that energy costs in England have risen since world economies reopened in the summer of 2021, exacerbated by hostilities between Russia and Ukraine(2). Faced with higher energy prices, the average household annual energy bill for typical consumption will be £1,928—up 59% since winter 2021 when most COVID-19 restrictions were lifted(3). Over 36% of households spent more than a tenth of their income after housing costs on energy last year, compared with 20.5% back in 2021(4)(5). Unsurprisingly, this has squeezed household budgets, pushing vulnerable families into fuel poverty. 

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Such statistics reveal a reversal from a long-running trend of the fuel poverty rate—the proportion of households in fuel poverty in England—declining from 22% in 2010 to 13.4% in 2019. This drop was achieved through energy efficiency improvements, among other factors, leading the fuel poverty rate to stabilise around 13%, even with high fuel costs(6). What is seemingly secret, however, is how this varies across England. Examining post-pandemic data by rurality reveals surprising results: the fuel poverty rate is still falling in urban areas but increasing in rural areas. 

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This article delves into investigating why this is the case, and what can be done to better understand and alleviate fuel poverty.
 

Fuel Poverty Overview​

Fuel poverty is when a household lives in a property with a fuel poverty energy efficiency rating (FPEER) of band D or below, and has a residual income below the poverty line after necessary energy expenditure. Properties rated band D or below are considered energy inefficient, meaning more energy is required to maintain a reasonable temperature.

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The income threshold, calculated as 60% of after housing costs (AHC) median income, was £17,291 in 2022. Households are below this if their AHC equivalised income (earnings from work/benefits, subtracting rent/mortgage payments, then adjusted to account for dependents) minus equivalised fuel costs (modelled energy requirements for heating, hot water, lights/appliances, and cooking, adapted for property size and occupants, then matched with corresponding fuel prices) is less than this figure.

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For example, a household with AHC equivalised income £14,755, equivalised fuel costs £2,321, and a FPEER rating in band E would be classed as ‘fuel poor.’ This is because property is in a band below D, and the household AHC equivalised income - equivalised fuel costs equals £12,434; lower than the income threshold of £17,291.

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The government measures fuel poverty using the Low Income Low Energy Efficiency (LILEE) indicator in England(7). In 2022, an estimated 3 million households were in fuel poverty in England(8).