To heat or eat?

fuel-povertyAdvent may be a time of hope and expectation – but it is also for many a time of dread. As the thermometer starts to plummet, increasing numbers of people are faced with the unenviable ‘choice:’ To heat or eat?  

For some, this is quite literally, a matter of life and death.

In the freezing weather of 2012, 31,000 people in the UK died unnecessarily – 10,000 due to cold homes.

The increasing cost of energy in the UK has regularly hit the headlines over recent years. Combined with the economic downturn, cuts to benefits, and lower wages, rising prices have contributed to a significant increase in fuel poverty. People are unable to adequately heat their homes; they have to make the choice whether to heat their homes or put food on the table, and in some cases they can’t afford to pay for the energy it would take to cook their food.

Living in a cold home affects children’s educational attainment, emotional wellbeing, and resilience. In adults, it increases the risk of heart attacks and strokes; exacerbates colds, flu, rheumatism and arthritis, and severely undercuts mental health. Social isolation is increased (you can’t invite friends back to a home like a fridge), and elderly people are particularly vulnerable. It’s not a small problem either: almost 4 million households in the UK are in fuel poverty.

Take Jamie and Karen from Manchester. Both struggle with health problems, as does one of their three young children. They have prepayment meters for both gas and electricity, and spend at least £40 a week on energy. They made enquiries about having their expensive prepayment meters removed, but failed the credit check required by fuel companies. They have also built up arrears on their energy account well in excess of £500, which also prevents them from switching to another energy supplier and a cheaper tariff.

One in six energy customers pay for their energy via a prepayment meter – and pay over the odds for doing so. Households with prepayment meters pay on average £253 more per year than those who pay by direct debit.   This is the reality of the ‘Poverty Premium’: The basic injustice that those with the least end up being charged the most for many essential goods and services – not just energy, but insurance, furniture and household goods – and for access to money (credit) itself.

Save the Children estimate that the Poverty Premium paid by low-income households can be as much as £1,280 a year.

This is an expense that Jamie and Karen – and thousands like them – cannot ill afford to pay.

ebicoIn 1988, two Christians, scandalised by the Poverty Premium founded a not-for-profit energy supply company, Ebico (www.ebico.org.uk). Unlike every other energy company, Ebico charges the same price to everybody regardless of whether they pay by prepayment meter or direct debit. Ebico also has no standing charge for both gas and electricity throughout Britain, and this significantly reduces the bills of low-use customers.

Over the next two years Church Action on Poverty will be exploring other practical ways of reducing the Poverty Premium in relation to food, fuel or finance. If these costs could be reduced by even £10 a week, it would make a huge difference to household budgets calculated to the last penny.

Meanwhile, as you look expectantly forward to a tasty roast turkey (or a healthy nut roast) in a warm and toasty home this Christmas, remember those who struggle to afford either.

Food, fuel and finance: Tackling the Poverty Premium is published by Church Action on Poverty in conjunction with the Iona Community and Faith in Community Scotland and others on 8 December. www.church-poverty.org.uk

With thanks to Alison Webster for some of the research and contents of this blog.

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