UK Housing Review 2022 shows millions of households could be plunged into fuel poverty unless government acts to address spiralling costs and energy inefficiency

Analysis for the upcoming 2022 UK Housing Review shows that low-income households are bearing the brunt of rising inflation and face being plunged into poverty if Government does not intervene. In England alone, nine million poor people live in energy-inefficient homes, making them particularly vulnerable to inflated energy prices. Even before the energy price increases, 39.1 per cent of owner-occupiers and 37.6 per cent of private renters were living in fuel poverty, along with 23.2 per cent of social tenants.  

The Joseph Rowntree Foundation examined the drivers of poverty within individual tenures in England, looking at energy efficiency by sector. Although higher poverty rates are found in the social rented sector, tenants are more likely to live in energy-efficient homes than private tenants or owner-occupiers: 56 per cent of social rented tenants in England live in a property in EPC bands A-C and only three per cent of properties are rated E or below. The private rented sector had only 29 per cent of properties rated in the A-C bracket and 19 per cent in E or below. Owner-occupiers faired worst, with 27 per cent of properties rated A-C and 22 per cent rated E or below. The consequences for numbers living in poverty who also live in energy-inefficient housing (EPC band D or lower) are considerable. There are 2.2 million social renters in those circumstances but 6.8 million people living in poverty in private homes with low energy efficiency, of whom the majority are owner-occupiers. 

Benefit levels have not kept pace with rising inflation. Based on conservative (pre Ukraine conflict) estimates the Review finds that nine million households in receipt of income-related benefits will incur an average real-terms cut of £500 per year, with a ‘double whammy’ for working claimants who will be hit by a rise of 1.25 per cent in the national insurance rate for the social care levy. Latest analysis from the Resolution Foundation estimates the conflict in Ukraine could push peak inflation in 2022-23 above eight per cent. This could leave the typical real household income (for non-pensioners) four per cent – or £1,000 – lower than in 2021-22. This is a scale of fall only previously seen around recessions. 

Rising inflation means everyday essentials and services cost more. Rising energy prices disproportionately affect low-income households, with energy bills typically accounting for a higher proportion of their disposable income. 

Time limited discretionary funds have been welcomed but they make the benefit system more complex. Arrangements for allocating discretionary funds and differences in the way local authorities manage them have also led to a postcode lottery. The level of funding available to local authorities is well short of what is required. 

Sam Lister, policy officer at the Chartered Institute of Housing said: “The Government needs to be much bolder in its approach to this looming crisis and at the very least increase benefits in line with actual inflation in April 2022 to mitigate some of the extra costs. We’re calling on Government to reinstate the £20 Universal Credit uplift, remove the benefit cap and introduce clear, longer-term plans to tackle homes with poor energy efficiency, especially in the private sector. Without this we will see many more households and families plunged into poverty.”