Energy crisis: New method announced to pinpoint most vulnerable households
A new way to define and measure which households are struggling with rising costs has been published to help policy makers provide support.
The University of Sheffield have published a new study highlighting that employment status, housing tenure inability to save, energy prepayment methods and household composition are indicators of households who may be struggling with current energy prices.
Published on Friday 8th March, the study was also produced by the UK Energy Research Centre, and Universities of Nottingham, East Anglia, and Macedonia in Greece. It looked at a sample of households between 2016 and 2022.
Low energy price resilience (LENRES) is also associated with worse health, disability, and wellbeing outcomes for adults. This is mainly driven by the stresses of falling behind on energy bills.
Reasons for looking into how households can be better supported with the ongoing energy crisis have stemmed from recent government figures. Estimates show that around 37% of households now spend more than 10% of their residential income on energy, after deducting housing costs – a threefold increase compared to pre-pandemic levels.
Against this backdrop, recent data has also found that energy-related debt has risen to record-breaking levels – £3.1bn.
Dr Andrew Burlinson, from the University of Sheffield’s Department of Economics and UK Energy Research Centre, said: ‘Our study puts forward a definition and a quantifiable measure of low energy price resilience that can be used to inform policy making aimed at preventing the worst economic, health and wellbeing consequences of high and prolonged energy price events on households in the UK.’
Professor Giulietti from Nottingham University Business School added: ‘The UK government has already attempted to mitigate the impact of the crisis with measures such as the universal energy price guarantee, which has allowed for speed of action in the intervention.
‘However this was a temporary measure for most consumers and potentially failed to support the most vulnerable.’
‘As price volatility and uncertainty persist, policy interventions in the energy market will need to be better targeted to avoid further detriment to the most vulnerable households. This could include measures targeted at improving supply resilience as well as demand, more specifically individual household resilience in the longer-term.’
As well as this new study examining how households can be better financially supported, Jeremy Hunt announced in his Spring Budget that the Household Support Fund – a scheme that sees councils distribute certain amounts of money to vulnerable households – will be extended after it was originally due to end at the end of this month.
Image: KWON JUNHO
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