Fuel poverty and extreme fuel poverty: estimates

A comparison of fuel poverty and extreme fuel poverty rates between the current and proposed new definition, across a range of household and dwelling characteristics for 2017.

There was very little change in the overall fuel poverty rate in 2017 under the proposed new definition (23.7%) compared with the current definition (24.9%). However the rate of extreme fuel poverty increased from 7.0% to 11.9%.

The impact of the new definition in 2017 was similar to that which was previously identified based on the 2016 and 2015 Scottish House Condition Survey (SHCS) data, which were published in Equality Impact Assessments^[2]. However, the analysis in this paper is for a wider range of household and dwelling characteristics and also includes comparisons of rates of extreme fuel poverty.

There was a substantial decrease in fuel poverty rates in rural areas between the current definition (43%) and the new definition (29%), which can be explained by the introduction of an income threshold under the new definition. However, there was little change in the rate of extreme fuel poverty in rural areas between the current definition (16%) and the new definition (19%). This means that the gap between the fuel poverty rate and extreme fuel poverty rate in rural areas was narrower under the new definition than the current definition. This suggests that around two thirds of rural households that are still in fuel poverty after the income threshold has been applied, are experiencing extreme fuel poverty.

In urban areas, fuel poverty rates were slightly higher under the new definition (23%) than the current definition (21%), and extreme fuel poverty rates also saw an increase, from 5% under the current definition to 10% under the new definition.

Under the new definition, almost half of all fuel poor households (47%) were 'other' household types (where all adults are under 65 with no children), while around a third were older households and 17% were families. This is a shift from the current definition where older households made up around half of fuel poor households, over a third were other households, and families made up 11% of fuel poor households.

For older households, the new definition showed lower fuel poverty rates than the current definition (39% under the current definition and 26% under the new definition in 2017), while the opposite trend was seen for families and 'other' households (where all adults are under 65 with no children). For 'other' household types, fuel poverty was at 21% under the current definition and 26% under the new definition and for families was at 12% under the current definition and 17% under the new definition. Extreme fuel poverty rates were higher under the new definition than the current definition for all household types, with the largest increase seen for other households (up from 6% under the current definition to 13% under the new definition).

The new definition resulted in higher fuel poverty rates than the current definition for households in the social sector and private rented sector, and this was also true for extreme fuel poverty, although for private rented homes the magnitude of the change was larger (from 8% under the current definition to 24% under the new definition), than for social rented homes (6% under the current definition and 16% under the new definition).

Local Authority and Housing Association homes showed higher fuel poverty rates under the new definition than the current definition, and this trend was also observed for extreme fuel poverty for these households. Households that were owned outright showed much lower fuel poverty rates under the new definition (from 35% under the current definition to 18% under the new definition), however the change in extreme fuel poverty rates for owned outright households was small (12% under the current definition and 11% under the new definition). For mortgaged households, the change in fuel poverty and extreme fuel poverty rates was very small.

Dwellings in the most efficient EPC bands (B-C) showed increases in both fuel poverty and extreme fuel poverty rates (fuel poverty up from 13% under the current definition to 20% under the new definition, and extreme fuel poverty up from 2% to 7%). This trend will have been driven by the characteristics of people living in these houses, rather than energy efficiency itself. The people living in the most energy efficient homes who are brought into fuel poverty under the new definition would have had higher housing costs relative to income, which increases the proportion of their after housing cost income spent on fuel, as well as having low incomes. The fuel poverty rate showed relatively large decreases for households living in lower energy efficiency bands (E, F & G), and extreme fuel poverty showed a modest increase for dwellings in Band E from 16% to 21%. For dwellings in Bands F and G, there was no change in the extreme fuel poverty rate, with the rate remaining high at 38%, although the fuel poverty rate for these households did decrease from 69% to 45% between the current and new definition.

The breakdown by net weekly income bands showed that the poorest households (where net income was <£200 per week) had lower rates of fuel poverty under the current definition (88%) than the new definition (93%), and a substantially higher rate of extreme fuel poverty (up from 39% under the current definition to 67% under the new definition). Where net income was £200-£300 per week, there was an increase in fuel poverty, albeit to a lesser extent than the bottom income band, from 51% under the current definition to 55% under the new definition, and a corresponding increase in extreme fuel poverty (from 11% under the current definition to 22% under the new definition). All households with higher income bands (i.e. above £300 per week) showed lower fuel poverty rates under the new definition than the current definition, and no change in extreme fuel poverty rates.

Detached homes showed lower fuel poverty under the new definition (17%) than the current definition (29%), with no change in extreme fuel poverty rates (11% under both definitions). Semi-detached dwellings also saw a decrease in fuel poverty rates, albeit to a lesser extent than detached dwellings, from 26% under the current definition to 20% under the new definition, while extreme fuel poverty rates were slightly up (from 6% under the current definition to 11% under the new definition). Terraced dwellings showed no change in fuel poverty rates, but an increase in extreme fuel poverty (from 6% under the current definition to 10% under the new definition). Tenement flats and other flats showed higher fuel poverty rates and extreme fuel poverty rates under the new definition than the current definition.

Fuel poverty rates were lower under the new definition for dwellings built before 1919 and those built between 1965 and 1982, whilst other types of dwellings saw higher fuel poverty rates under the new definition. Extreme fuel poverty increased across all dwelling types.

Fuel poverty rates were slightly higher under the new definition for dwellings with gas as a primary heating fuel (19% under the current definition and 21% under the new definition), however much lower fuel poverty rates were observed under the new definition for dwellings with oil, electricity, or other fuel types as a primary heating fuel. Extreme fuel poverty rates were higher under the new definition for dwellings with gas, electricity, or other fuel types as the primary heating fuel, while those with oil as a primary heating fuel showed similar fuel poverty rates under both definitions.

Dwellings in the 15% most deprived areas according to the Scottish Index of Multiple Deprivation, saw higher fuel poverty rates under the new definition (27%) than the current definition (21%) and extreme fuel poverty rates were also higher for these households (up from 3% under the current definition to 9% under the new definition). For dwellings not in those areas, fuel poverty rates were slightly lower under the new definition (26% under the current definition and 23% under the new definition), but extreme fuel poverty rates were higher (8% under the current definition and 12% under the new definition).

Dwellings off the gas grid see a noticeable decrease in fuel poverty rates, from 38% under the current definition to 26% under the new definition, however extreme fuel poverty rates increased slightly for these dwellings, from 15% under the current definition to 17% under the new definition. A different pattern was observed for dwellings on the gas grid, with both fuel poverty rates and extreme fuel poverty rates seeing relatively small increases between the current and new definitions (fuel poverty up from 22% under the current definition to 23% under the new definition and extreme fuel poverty rate up from 5% under the current definition to 11% under the new definition).

Tables 1 and 2 below show the fuel poverty and extreme fuel poverty rates under the current and the new definitions of fuel poverty, for various household and dwelling characteristics.

Table 1: Fuel Poverty Rates (2017) comparing the current and proposed new definition

Table 2: Extreme fuel Poverty Rates (2017) comparing the current and proposed new definition