'Fuel poverty' in Britain

Despite plummeting temperatures, Rita Young only puts her central heating on twice a day. Instead, the 76-year-old widow from Peterborough, a town about 150 kilometers north of London, says she "tries to keep busy and warm."

Young survives on her UK state pension - one of the least generous in Europe - and is classed as being in fuel poverty. That's when more than 10 percent of a household income is spent heating and lighting the home.

As recently as 2008 - before the financial crisis and subsequent deep recession hit - an estimated 3 million British households were classed as being in fuel poverty. Since then, with incomes squeezed and salaries frozen, the figure has nearly doubled.

Although Britain has one of the most competitive markets for home energy in the 27-member European Union, Young claims the big fuel companies act like a "cartel," deliberately working together to keep prices high.

She's not alone. An internet campaign has been launched this week to end "profiteering" by the country's big six energy firms. Campaigners are urging the British public to sign the petition.

Massive price hikes

Over the past 12 months, energy bills have risen an average of 16 percent. In just 6 years, British households saw an 80 percent hike in electricity and gas prices.

The term fuel poverty was coined in the 1980s to describe those families least able to afford to heat their homes and who, traditionally, lived in properties that were the hardest to heat.

"One of the big challenges we face in the UK is we have a poor housing stock," said Teresa Perchard from Citizens' Advice, a national network of volunteers who offer legal support to the public.

"We have a lot of homes that are not energy efficient because we have been used, in the past, to having very cheap energy," she added.

Lacking proper insulation

As recently as 2006, up to 8 million homes, more than a third of Britain's housing stock was estimated to have inadequate loft or cavity wall insulation.

According to Perchard,the government is "spending quite a bit of money trying to retrofit properties to insulate them [properly]. But in some cases, its just not possible to do so at an economic price."

A nationwide program that offers grants to improve insulation is due to end next month as the government, which already anticipates several years of deep cuts in public spending, looks for new ways to fund these types of initiatives.

Charities are worried that the government wants to pass the cost of the program onto consumers.

"There's a proposal to raise £1.3 billion (1.56 billion euros, $2 billion) from consumer bills," said Perchard. The organization Citizens' Advice think it would be fairer if the funds were generated through general taxation, as British households are already smarting from their growing home energy bills.

Campaigners say energy efficiency is just one part of the fuel poverty issue. Income and the cost of fuel are the other two major factors.

Double the deaths

Compared to Germany and the Netherlands, who have similar climates, government figures show Britain has almost double the number of deaths from exposure to the cold. An estimated 3,000 people are expected to die unnecessarily from the cold this year.

Some charities claim Prime Minister David Cameron has picked the worse time to cut back on a 'Winter Fuel Allowance,' which was meant to help tackle the problem among the elderly. The allowance has been cut by a third.

"The amount that people got this year was lower than last year just as fuel bills have been rising," said Sally West from the charity Age UK.

West says the winter fuel payment was meant to help those who didn't retire on a generous final salary scheme. "The level of the UK state pension is low and often older people have to claim benefits that top up that income and they have to go through a means test to do that."

Despite well publicized government welfare programs, "people don't always know that they're available and sometimes people don't want to claim because it's like asking for charity," West said.

"There's also social tariffs that energy companies can offer to help their low-income consumers," said Age UK's West, referring to subsidized rates for the vulnerable.

A little bit makes a big difference

There is some respite for consumers. Gas prices have begun to come down.

The price falls can't come soon enough for Rita Young who has to budget hard to make ends meet. The pensioner said her energy bills got out of control recently when her power supplier underestimated how much fuel she was using.

"They let me pay £45 a month for about 2 years. Then I reassessed my bill myself and I found that I was in debt to them by about £300 and they were just going to let it creep up. It took me another 18 months to pay it off," said Young.

What may have been a simple oversight for a large multinational energy company wreaked havoc on the finances of pensioner surviving on a fixed income.

Author: Nik Martin
Editor: Sarah Steffen