Since 2004, the average household energy cost has risen five times faster than the average household income making energy bills Brits’ number one household concern ahead of mortgage repayments, according to a recent report.
The research conducted by uSwitch highlighted that while the average household income has increased by just 20pc in the last eight years - from 32,812 to £39,468, energy costs have soared by 140pc. This has left 90pc of Britons worried about how to meet their energy bill payments compared to 77pc concerned about the rising price of food and 43pc about mortgage repayments.
In 2004, the average annual cost of energy was £522 which equated to around 1.6pc of the household’s income whereas today’s households are paying an average of £1252 per year, typically eating up twice the amount of the overall income at 3.2%. For a retired couple living on a basic state pension of £11,075, energy prices could consume over a tenth (11pc) of their combined income.
The rapid escalation has led to 32pc of consumers deeming energy prices ‘unaffordable’. The average Briton is left with a disposable income of just £297 per month after all household bills have been paid. 83pc of respondents blame energy bills for their lacking disposable income with just under a fifth (17pc) claiming that they have no disposable income left whatsoever after paying their energy costs.
Last winter, a record number of Brits (82pc) ‘rationed’ or lessened their energy usage in order to try and cut costs. Director of Consumer Policy at uSwitch, Ann Robinson reflected on their research:
“Energy now accounts for a significant slice of household income which is why the numbers rationing their energy use have risen so steeply in recent years. But going cold or without is a short-term and potentially harmful fix and not a long-term solution.”
She went on:
“This is the cold reality facing households today; in less than 10 years our energy bills have rocketed by 140pc. The break-neck speed at which energy prices have sprinted upwards has caught many people unawares. Consumers are still playing catch-up.”
“The fact is that consumers can control how much they spend on energy by making their homes more energy-efficient and paying less for the energy they do use by moving to a competitively-priced energy plan.”
Worries have arisen that with rising energy costs falling increasingly out of sync with household incomes many families will find themselves pushed into fuel poverty. Households are deemed to be living in ‘fuel poverty’ when their energy bills equate to more than 10% of their income.
Charity Director of Age UK, Michelle Mitchell said:
“Living in fuel poverty is miserable. It leads to serious health problems and at worst kills people,”
“The independent Hills Fuel Poverty Review said that even if only 10pc of excess winter deaths are due to fuel poverty that would be more deaths per year than the fatalities on our roads.”
The Government have recently proposed a policy called ‘The Green Deal’ to help provide extra financial help and incentives for those most affected by rising energy costs.