If all the UK’s Big Six energy suppliers join the four which have already announced price rises, the number of households living in fuel poverty could rise to 6.6 million, a charity is warning.

According to fuel poverty charity National Energy Action (NEA), over 5.4 UK households are currently living in fuel poverty – where over 10% of a household’s income goes on fuel costs.

But this figure is set to rise following the announcements by four of the Big Six energy suppliers that prices will go up this month and next.

E.ON was the latest to announce prices increases of 18.1% for gas and 11.4% for electricity, but ScottishPower, British Gas and Scottish and Southern Energy are taking similar steps.

The NEA says the only answer is to improve the energy efficiency of low-income and vulnerable households to minimise the impact of energy price rises. But the most vulnerable households will also need energy bill rebates and financial support through the Winter Fuel Payment, adds the charity.

“With energy prices at unprecedented levels and all projections indicating a continued upward trend there is an evident need for action to tackle the question of affordability,” says NEA chief executive Jenny Saunders.

The charity cautions that government programmes aimed at addressing both fuel poverty and carbon abatement result in levies on domestic energy bills that can serve to drive more households into fuel poverty.

“What we need in the short-term is for Government to divert the additional revenues accruing from VAT on domestic gas and electricity to fund energy efficiency programmes for low-income households,” suggests Saunders.

The current increase in fuel prices – if rolled out across all the major players – will bring in an additional £225 million in VAT receipts to the Government. This windfall could be used to supplement Warm Front funding and similar schemes, says the NEA.

“Longer term we need an Energy Company Obligation which is both adequately resourced and ring-fenced to fund a comprehensive energy efficiency programme for low-income households and… a clear road map showing how the UK [can] eradicate fuel poverty,” says Saunders.

For further information:
www.nea.org.uk

Related stories:
E.ON joins in UK gas and electricity price rises (9-Aug)
Good Energy increases gas prices but holds electricity until 2012 (4-Aug)
Scottish and Southern Energy latest utility to raise prices (21-Jul)
UK Government must change course on fuel poverty, say NGOs (20-Jul)
Fuel poverty hits 5.5 million UK households as prices rise (15-Jul)
UK Energy Secretary Chris Huhne condemns British Gas price rise (8-Jul)
Scottish Power price hike could drive households towards energy efficiency (9-Jun)