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£12 bill rise for energy upgrade

Ofgem has announced that bills are set to rise by an average of £12 a year to pay for a £24bn network upgrade. 300,000 more homes are likely to have been pushed into "fuel poverty" by Christmas, a campaign group has warned.

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What is fuel poverty?

Families are considered to be in fuel poverty when they have to spend more than 10% of their incomes on keeping their homes warm.

Fuel poverty is when you spend more than 10% on energy bills Credit: Martin Keene/PA Wire

Campaigning organisation the Fuel Poverty Action Group said that nearly half of the UK's fuel poor households are pensioners, a third contain people with some sort of disability or illness, a fifth contain a child aged five or under and one in 10 house someone aged 75 or over.

The Fuel poverty ratio is therefore defined as: Fuel poverty ratio = fuel costs (modelled consumption x price) ÷ income

In the calculation of this ratio, the fuel consumption is modelled, to ensure the household achieves the satisfactory heating regime.

Therefore, if the dwelling is actually heated to a temperature below the level defined as being satisfactory, the estimated bill for that household will be higher than the actual bill and vice versa.

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