More than 465,000 UK households will find themselves falling into fuel poverty this winter, after a rise in the energy price cap earlier this month.
Research by data science firm Outra said the number of households spending more than a tenth of their income on heating went up by 12.2% on 1 January, compared to October 2023.
It means the UK now has 4.29 million households enduring fuel poverty, up from 3.83 million, Outra’s research found.
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The largest number of new UK households entering fuel poverty are in Birmingham, with an extra 19,000, followed by South Yorkshire with 17,200 more, Newcastle with another 12,100, and Glasgow with an 11,900 increase.
The energy price cap, which limits the amount a supplier can charge per unit of energy, has led to an average increase of £94 per year on energy bills, from £1,834 to £1,928.
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Bills are expected to come down again when the following energy cap comes into effect in July.
Outra said it shows that, while inflation has eased, the cost of living crisis is still dominating the lives of British households.
The firm’s chief data and technology officer, Peter Jackson, said: “Our household level data analysis shows that, while fuel prices have dropped from their peak, financial pain felt by those struggling with a sharp rise in household bills is far from over.
“With this 5% rise in energy costs for the average household and the coldest weeks of winter potentially still ahead of us, many will need to make sacrifices if they have any hope of making ends meet.”
The data science firm also found self-defined “high-risk” households are more likely to fall into fuel poverty, and the new rates are expected to cause 383,000 “high-risk” households to become fuel-impoverished – an increase of 61,000 or 19% more than the number reported in October 2023.
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Between October 2023 and January 2024, these households will face an average increase of 6.68% in their energy bills. This hike is likely to push a significant number of households into fuel poverty, given their current financial struggles.
Housing costs will continue to be a “significant burden” for people as increases in mortgage payments and rent has put increased pressure on finances, Outra said.
The Resolution Foundation has found that 38% of people said their financial situation is getting worse, while less than half that figure, 15%, reported an improving one.
The report said that an increase in benefits and wages may help some people, but those who have not benefited from the rise may be suffering “disproportionately”.
