December 20 - Fuel poverty: facts and solutions by Tony Watts

Tony Watts, Chairman of the South West Forum on Ageing, who already wrote for Ostrich an in-depth article on the challenges and opportunities of an ageing society, is back today to discuss fuel poverty, why some pensioners suffer even more than most... and what we can do about it.

"Fuel poverty" and "excess deaths"

Last winter, the UK recorded some 31,000 "excess deaths". To put it into context, that’s slightly shy of the population of West Somerset. Shamefully, far colder countries like Sweden see nothing like this sort of spike.

Why is it so bad? Agreed, colder weather leads to more chest infections and more falls.

But the single biggest reason why we see this annual slaughter of our elderly is the cost of keeping warm.

Putting aside the workings of the Big Six, we, as a nation, have failed to invest in building new homes, or refurbishing existing ones, to make them properly insulated and efficiently heated. Worst of all, a great many of those homes are occupied by vulnerable people on low incomes.

There’s a neat phrase to define this dilemma: "fuel poverty". Currently it means a household spending 10 per cent of its annual income on heating and lighting (4.5 million households in the UK in 2011).

The Government wants to redefine this to become "low income households facing high energy costs". That may well cut official figures, but will still leave millions choosing between heating and eating. And the Government’s reason for doing this (to focus resources on the most needy) is undermined by the latest move to reduce fuel bills by £50: the biggest cuts are to the ECO insulation schemes which have been hugely successful in insulating poorer households.

Who suffers most from fuel poverty?

But there’s more. Because over one third of a million pensioners rely on oil for their heating, which can be more than 50% more expensive than gas. Even worse, some older people are paying as much as 100% more than those on gas.

This last group are people paying through the nose for what is already an expensive fuel, because they trust their supplier with an arrangement called “auto top up”. Around 100,000 oil users – a high percentage on a pension – have opted to have their oil delivered by a single supplier without ordering it or anyone checking how much is already in the tank.

The attraction for older people is that they are told that they will never run out, and that they can pay monthly by direct debit. Both very reassuring features… but they come at a price. The company delivers at regular intervals - usually when they have a nearby delivery.

The downside is that there is no discussion about the price, and I have seen statements from customers being charged over 20p per litre more than the average price that day. These are trusting customers who don’t question what they are being charged and are not on the Internet to check whether what they are paying is fair.

So what do the sums look like for those relying on oil - and those dependent on auto top up?

• Someone living in a two bedroom home and using 10,000 kWh can expect to typically pay £500 a year for their gas (for heating and hot water).
• For the same amount of energy with oil, the price during 2013 has fluctuated between £700 and £900 (based on using 1200 litres pa).
• For someone on auto top up and paying 20p a litre more for their oil, their equivalent bill will be between £940 and £1140.

So what can we do about this?

Fuel poverty and excess winter deaths are long term problems that demand long term solutions: building more energy efficient accommodation for our ageing population and investing seriously in harder to insulate homes (such as solid wall houses).

We can also enable older people to group buy their oil - the approach DECC recommends. A number of schemes already exist around the country, but adoption numbers are still low as it is a time consuming business.

My response has been to collaborate with the UK’s biggest negotiator of community oil to set up a new website - seniorbuyingpower.co.uk / 01993 224111 - to help individuals as well as community groups.

Harnessing the buying power of the nation’s older population will mean savings of between 8 and 15% compared to what you would pay as an individual. For someone currently paying on a 'top up' arrangement, it could easily be a 30% saving or more.

All someone has to do is get in touch and provide their details, either as an individual or someone wanting to set up a group, and all the admin and negotiation is done for them by Community Buying unLimited. There is an annual membership fee with the first order (£24 for anyone under 60, £19 for seniors) and there is also an opportunity for care homes, community buildings, farms, schools, churches and businesses to be part of the scheme too - and help drive down the price paid by seniors.

It’s not the whole solution to oil fuel poverty, but it’s a start...