RESEARCH HIGHLIGHT: Energy inefficiency & inability to downsize pose even bigger threat to low-income pensioners than loss of Winter Fuel Payments

The UK Government’s policy to scrap Winter Fuel Payments could disproportionately affect low-income pensioners in England, new analysis suggests. But the same study argues that the energy inefficiency of homes and challenges involved in downsizing will have an even more harmful effect this winter.

The study, published in Energy Research & Social Science, was completed shortly before the Winter Fuel Payment vote was taken, by researchers from the University of Cambridge and Delft University of Technology (TU Delft).

The researchers raise particular concerns about the impact of the policy on pensioners with annual incomes of between £11,300–£15,000 for single pensioners and £17,300–£22,000 for couples. Drawing on data from the English Housing Survey, which sampled nearly 12,000 households across all income groups, the study investigated how income, energy efficiency, home size, household type, and tenure status impacted on energy expenditure.

The researchers found that an increase of £1 per year in income (after housing costs, tax and welfare payments) was associated with a marginal increase in heating spending of about one-tenth of a penny. The study also found that just a small energy efficiency improvement – a one-point increase in the SAP12 rating (The Government's Standard Assessment Procedure for Energy Rating of Dwellings – had a major impact on households in energy poverty, offering an average reduction in annual heating costs of £21.59 per year.

Floor area also had an impact. The researchers found that a one square metre increase was associated with an annual increase in heating spend of £5.04 per year, for households facing energy poverty, making this the worst affected group. This compares with £4.18 per year for high-income households, £3.65 per year for low-income households, and £2.99 per year for very low-income households not in energy poverty.

"Without retrofit initiatives, energy poverty will persist in the UK,"Professor Minna Sunikka-Blank, Dept of Architecture

Energy efficiency

Across all household types, the researchers found that the energy efficiency of the dwelling had by far the biggest impact on heating expenditure.

“The most effective strategy to warm up the homes of people living energy poverty is to increase the energy performance of their dwellings,” Professor Minna Sunikka-Blank,Dept of Architecture

Specifically, the authors advise that the SAP12 rating of homes need to be increased to at least 72.

Each increase in SAP12 energy efficiency rating corresponds to a reduction in heating costs of around £20 per year, meaning that for households in energy poverty, with an average SAP12 rating of 59.48, increasing the rating to the level of low-income households not in energy poverty, 71.45, could reduce heating costs by about £240 per year.

The authors make clear that energy savings would not be sufficient to pay for these energy-efficiency upgrades. They would require targeted financial support.

The study examined the Home Size, One Person household spending and Mitigating impact of Winter Fuel Payment cuts, 

R. Galvin, M. Sunikka-Blank, T. Croon, ‘Juggling the Basics: How Much Does an Income Increase Affect Energy Spending of Low-Income Households in England?’, Energy Research & Social Science (2024). DOI: 10.1016/j.erss.2024.103766

Original University of Cambridge article

Image credit: Gioconda Beekman via Flikr under a CC license