Scottish house condition survey: 2019 key findings

4 Fuel Poverty

Key Points

• In 2019 an estimated 24.6% (around 613,000 households) of all households were in fuel poverty. This is similar to the 2018 fuel poverty rate of 25.0% (around 619,000 households) but lower than that recorded in the survey between 2012 and 2015.
• 12.4% (or 311,000 households, a subset of the 613,000 in fuel poverty) were living in extreme fuel poverty in 2019 which is similar to the 11.3% (279,000 households) in the previous year but a decrease from 16% (384,000 households in 2013.
• The actual median fuel poverty gap for fuel poor households in 2019 was £750. This is higher than the median fuel poverty gap between 2015 and 2018.
• The median fuel poverty gap (adjusted for 2015 prices) for fuel poor households in 2019 (£700) is higher than in 2018 (£610) but similar to the median gap in 2012 to 2017.
• Between 2018 and 2019, rates of fuel poverty increased in remote rural areas (from 33% to 43%), increasing the gap when comparing overall urban (24%) to overall rural areas (29%). Similarly, levels of extreme fuel poverty increased in remote rural areas (from 23% to 33%), so extreme fuel poverty rates in rural areas (19%) were higher than in urban areas (11%).
• Overall rates of fuel poverty differed between the social (37%) and private sector (20%) although rates of extreme fuel poverty were similar (14% and 12%, respectively) in 2019.
• Levels of fuel poverty among households using electricity as their primary heating fuel have remained the highest, at 43%, compared to households using gas (22%), oil (28%) and other fuel types (31%) as their primary heating fuel in 2019.
• A higher proportion of households with a pre-payment meter (PPM; electricity, gas or both) were in fuel poverty compared to those without a PPM, 36% compared to 22% respectively.
• For both fuel poor and extreme fuel poor households, the lowest rates of fuel poverty are associated with higher energy efficiency standards. 20% of households living in post-1982 dwellings or in dwellings rated C or better were fuel poor with 9% and 7%, respectively, in extreme fuel poverty in 2019.
• Fuel poverty and extreme fuel poverty have a strong association with income with rates increasing as weekly household income decreases. Extreme fuel poverty rates in the second lowest income band (£200-£299.99 a week) have increased in 2019 (25%) compared to 2018 (16%).
• Although low income is associated with fuel poverty, it is not equivalent. 73% of fuel poor households were also income poor in 2019 whilst the other quarter would not be considered income poor (27%). This is a similar pattern to 2018 (70% fuel and income poor and 30% fuel poor not income poor).

4.1 Definition and Measurement of Fuel Poverty

4.1.1 Definition of Fuel Poverty

149. Under the 2001 Housing (Scotland) Act (section 88), the Scottish Government was committed to eradicating fuel poverty as far as practicably possible by November 2016. In June 2016, the Minister for Local Government and Housing informed Parliament that, based on the advice received from experts, it was unlikely that the statutory fuel poverty target would be met. This was confirmed by 2016 and 2017 fuel poverty rates, under the old definition of fuel poverty, of 26.5% and 24.9% respectively.

150. The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Bill was introduced to the Scottish Parliament on 26 June 2018 and the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 received Royal Assent on 18th July 2019. This includes a new definition of fuel poverty based on advice from an independent panel of experts and further scrutiny and amendment by the Scottish Parliament.

151. As set out in section 3 of the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act, a household is in fuel poverty if:

• in order to maintain a satisfactory heating regime, total fuel costs necessary for the home are more than 10% of the household's adjusted (i.e. after housing costs) net income; and
• if, after deducting those fuel costs, benefits received for a care need or disability^[12] and childcare costs, the household's remaining adjusted net income is insufficient to maintain an acceptable standard of living.

The remaining adjusted net income must be at least 90% of the UK Minimum Income Standard (MIS) to be considered an acceptable standard of living, with an additional amount added for households in remote rural, remote small town and island areas.

152. Extreme fuel poverty follows the same definition except that a household would have to spend more than 20% of its adjusted net income (after housing costs) on total fuel costs to maintain a satisfactory heating regime.

153. Where a household is in fuel poverty, the fuel poverty gap is the annual amount that would be required to move the household out of fuel poverty. This is either:

• the amount required so that the fuel costs necessary for the home are no longer more than 10% of the household's adjusted net income (after housing costs), or
• the amount required which, after deducting fuel costs, benefits received for a care need or disability and childcare costs, means the household's remaining adjusted net income is sufficient to maintain an acceptable standard of living.

The figure taken to determine the gap for each household is the lower of the two options.

154. The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 also set targets to eradicate fuel poverty. The 2040 targets are that:

• no more than 5% of households in Scotland are in fuel poverty
• no more than 1% of households in Scotland are in extreme fuel poverty
• the median fuel poverty gap of households in Scotland in fuel poverty is no more than £250 adjusted to take account of changes in the value of money.

155. The figures presented in this report are a best estimate of fuel poverty rates, extreme fuel poverty rates and the median fuel poverty gap under the new definition of fuel poverty as set out in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act. They reflect amendments made to the legislation during the Bill process up to and including Stage 2.

156. For statistics in this publication, the application of an uplift to the MIS for remote rural, remote small town and island households is based on previous studies^[13] and we deduct all relevant care and disability benefits except Severe Disablement Allowance at part 2 of the definition.

157. In addition, a satisfactory heating regime is defined as follows:

• For "vulnerable" households (those where at least one member is aged 75 or over, or at least one member has a long-term sickness or disability), 23°C in the living room (zone 1) and 20°C in other rooms (zone 2), for 16 hours every day.
• For other households, 21°C in the living room (zone 1) and 18°C in other rooms (zone 2) for 9 hours a day during the week and 16 hours a day during the weekend.

158. The above areas of the definition will be updated in future publications to reflect the Stage 3 amendments, the Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020 and Fuel Poverty (Additional Amount in respect of Remote Rural Area, Remote Small Town and Island Area) (Scotland) Regulations 2020 which came into force on the 26th February 2020. These regulations set out the types of households for which enhanced heating regimes are appropriate and specify who is to determine the uplifts to the MIS for households living in remote rural, remote small towns, and island (RRRSTI) areas.

159. The first set of fuel poverty estimates fully compatible with all of the elements of the new definition in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act, including the regulations above, requires additional information to be collected from 2020 onwards^[14] and the production of a new MIS for RRRSTI areas.

160. Due to the change in the definition of fuel poverty, the estimates in this Key Findings report are not comparable to those in Key Findings reports prior to 2018. However the 2012-2019 statistics within this report are comparable to each other and also to the 2012-2018 estimates presented in the 2018 Key Findings and the 2016-2017 estimates presented in the publication entitled "Latest estimates of Fuel Poverty and Extreme Fuel Poverty - following Stage 2 of the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Bill".

4.1.2 Measurement of Fuel Poverty

161. Although space heating is the largest component of the energy consumption which underpins the fuel poverty estimate, there are other types of energy use that are also taken into account, such as water heating, lighting and appliance use, and cooking. All types of energy expenditure are estimated on the basis of a standard set of behavioural assumptions and do not reflect the actual energy use of the household, which may vary considerably depending on personal preference and priorities relative to other types of household expenditure.

162. Figure 18 shows that in 2019, on average, around 76% of the modelled household energy consumption was from space heating, 11% from water heating, 10% from lighting and appliance usage, and 3% was accounted for by cooking. These proportions are similar to 2018.

Figure 18: Mean Household Energy Consumption by End Use, 2019

Sample Size: 2,997

Note: Figures do not add to 100% due to rounding

163. The energy costs of maintaining a satisfactory heating regime and other uses of energy are modelled using data from the physical inspection of dwellings and the household interview conducted as part of the SHCS, as well as information on consumer fuel prices. The methodology for modelling the cost of energy use was updated for the 2014 Key Findings report and details were provided in the accompanying 2014 Methodology Notes.

164. The current report continues to use this improved method for setting the cost of the domestic energy requirement. A further small improvement introduced in the 2016 survey about pre-payment meters for energy supply is also continued, which has allowed us to improve the accuracy of fuel price information for pre-payment users, who are more common among lower income groups which are at higher risk of fuel poverty. In 2019, 17% of households in Scotland had a pre-payment meter (mains gas, electricity, or both), a similar rate as in 2018 (19%).

165. In 2019, two further small improvements were introduced. Firstly, more detailed information on combi boilers have been included to improve the accuracy of calculations surrounding hot water losses. This is expected to increase the mean BREDEM energy consumption by around 0.14% (33 kWh) per year.^[15]

166. Secondly, a household's lights and appliances are now assigned as using an off-peak electricity tariff if an off-peak electricity meter is present, even if there is no form of electric heating in the dwelling. Previously, where a household did not have a form of electric heating, the lights and appliances were assumed to use standard electricity. This change does not affect the energy consumption of a dwelling, only the fuel prices applied to the energy associated with lighting and appliance use. Figure 18 above shows that in 2019, on average, around 10% of the modelled household energy demand was from lighting and appliance usage.

167. The cost of the energy requirement includes an allowance for the bill rebate provided under the Warm Home Discount (WHD) scheme.^[16]

4.2 Fuel Poverty and Extreme Fuel Poverty

168. In 2019 an estimated 24.6% (around 613,000 households) of all households were in fuel poverty (Figure 19 and Table 30). This is similar to the 2018 fuel poverty rate of 25.0% (around 619,000 households) but lower than that recorded in the survey between 2012 and 2015. Since 2016 the rate of fuel poverty has remained between 23% and 26%.

169. Around 12.4% (311,000 households) were living in extreme fuel poverty in 2019 which is similar to the 11.3% (279,000 households) in the previous year but a decrease from 16% (384,000 households) in 2013. Since 2015, the rate of extreme fuel poverty has remained between 11% and 13%.

Note: Energy requirement underpinning fuel poverty estimate modelled on the following basis: 2012 - 2013: BREDEM 2012 v.1.0; from 2014 onwards: BREDEM 2012 v.1.1, and New Prices to the adjustment of fuel price sources from 2013. From 2016 an improvement is included by assigning pre-payment metered fuel prices to the relevant households. From 2019 further improvements are included by using more detailed information on combi boilers to improve the accuracy of calculations surrounding hot water losses and assigning an off-peak tariff to relevant household's lights and appliances fuel prices.

Note: The 2012-2017 estimates are not comparable to those in the 2012-2017 Key Findings reports. See Section 4.1.1 for more details.

Table 30: Estimates of Fuel Poverty and Extreme Fuel Poverty since 2012

	Fuel Poverty		Extreme Fuel Poverty		Sample Size
	000s	%	000s	%
2012	691	29.0%	361	15.1%	2,728
2013	761	31.7%	384	16.0%	2,673
2014	697	28.8%	368	15.2%	2,643
2015	675	27.7%	317	13.0%	2,708
2016	631	25.7%	308	12.6%	2,794
2017	583	23.7%	293	11.9%	2,948
2018	619	25.0%	279	11.3%	2,905
2019	613	24.6%	311	12.4%	2,950

Note: There are some discontinuities in the underlying methods as follows: figures for 2012 allow for Warm Home Discount (WHD) adjustment only; 2013 include WHD and price source adjustment; figures from 2014 onwards include WHD and price source adjustment and an updated BREDEM model; from 2016 an improvement is included by assigning pre-payment metered fuel prices to the relevant households; from 2019 further improvements are included by using more detailed information on combi boilers to improve the accuracy of calculations surrounding hot water losses and assigning an off-peak tariff to relevant household's lights and appliances fuel prices.

4.3 Fuel Poverty Gap

170. Where a household is in fuel poverty, the fuel poverty gap is the annual amount that would be required to move the household out of fuel poverty. Time trends in the fuel poverty gap have been presented as the median gap before adjustment and the median gap adjusted to 2015 prices. The median gap before adjustment presents the actual amount that fuel poor households require to move out of fuel poverty. The adjusted median gap figures have been presented in order to assess progress against the 2040 fuel poverty gap target. The adjustment has been made in alignment with the increases or decreases in the annual average consumer prices index (CPI) over the period from 2015 to the year which the figure relates to.

171. In 2019, the median fuel poverty gap for fuel poor households was £750 (Figure 20 and Table 31). This is higher than the median fuel poverty gap from 2015 to 2018.

172. In 2019, the median fuel poverty gap (adjusted for 2015 prices) for fuel poor households was £700. This is higher than the median fuel poverty gap (adjusted for 2015 prices) in 2018 (£610) but similar to the median gap in 2012 to 2017.

173. The increase in the median fuel poverty gap (adjusted for 2015 prices) between 2018 and 2019 reflects the overall increase in domestic fuel prices in 2019 and hence the increase in modelled running costs as discussed further in sections 4.4.1 and 4.4.3.

Note: Data for this chart are provided in Table 31.

Table 31: Median Fuel Poverty Gap of Fuel Poor Households, 2012-2019

	Actual Median Fuel Poverty Gap (£)	Median Fuel Poverty Gap (adjusted for 2015 prices) (£)	Sample Size
2012	£680	£710	793
2013	£730	£740	831
2014	£730	£730	791
2015	£640	£640	742
2016	£650	£650	729
2017	£690	£660	728
2018	£650	£610	732
2019	£750	£700	742

4.4 Drivers and Trends

174. Fuel poverty is affected by levels of household income, the price of fuel required for space and water heating, the energy efficiency of housing and the use of fuel in households. Fuel poverty is distinct from poverty in that, while low income is an important driver, it is not a prerequisite. As shown in Table 37, fuel poor households are found in all income bands. Around 6% of all fuel poor households had weekly income above £400 before housing costs, which places nearly all of these households in the top half of the income distribution.

175. Figure 21 and Table 32 show indexes constructed to compare trends in three key drivers of fuel poverty since 2012.^[17] Measures of energy efficiency and household incomes are derived from SHCS data. The fuel price index is constructed from Department for Business, Energy and Industrial Strategy (BEIS) quarterly prices as described in section 4.4.1. Prices and incomes are presented in nominal (cash) terms.

176. Between 2012 and 2013 the rate of fuel poverty increased in line with the rise in the average fuel price index. In 2014 the rate of fuel poverty did not increase in line with the rise in the average fuel price index as there was an increase in median income which likely offset the fuel price increase. In 2015 and 2016, the decline in the price of fuel and improvements in energy efficiency was reflected in a reduction in the fuel poverty rate. In 2017 there was a further reduction in the fuel poverty rate, in line with a large increase in median income and some improvements to energy efficiency. The non-significant increase in the 2018 fuel poverty rate likely reflects increases in fuel prices whilst median income and energy efficiency remained similar to 2017.

177. The 2019 fuel poverty rate (24.6%) is similar to that in 2018 (25.0%). In 2019 there was an increase in the median income index and small increase in the energy efficiency index. This has been partly offset by a slight increase in the overall fuel price index.

Figure 21: Trends in Fuel Price, Energy Efficiency and Median Income, 2012 to 2019

Note: All values indexed to 100 in 2012. Data for this chart are provided in Table 32.

Fuel Price Index constructed as described in section 4.4.1.

Fuel poverty energy requirement modelled on the following basis: 2010 - 2013: BREDEM 2012 v.1.0; 2014 onwards: BREDEM 2012 v.1.1. From 2018 onwards there was a small update in the version of RdSAP underlying the energy modelling as described in section 3.3. From 2019 a further improvement is included by using more detailed information on combi boilers to improve the accuracy of calculations surrounding hot water losses.

Fuel poverty costs as follows: 2012 include WHD adjustment only; from 2013 onwards include WHD and price source adjustments; from 2016 an improvement is included by assigning pre-payment metered fuel prices to the relevant households; from 2019 a further improvement is included by assigning an off-peak tariff to relevant household's lights and appliances fuel prices.

Table 32: Fuel Price, Energy Efficiency and Income Indices

Survey Year	Fuel Poverty		Fuel Price Index		EE: A-D rated		Median Income
	%	Ix	Ix	Rebased	%	Ix	£	Ix
2012	29.0	100	122	100	80%	100	20,000	100
2013	31.7	109	130	107	81%	102	20,000	100
2014	28.8	99	135	111	79%	99	22,000	106
2015	27.7	96	128	105	80%	101	22,000	106
2016	25.7	89	121	99	83%	104	22,000	108
2017	23.7	82	122	100	84%	105	24,000	117
2018	25.0	86	129	106	85%	106	23,000	114
2019	24.6	85	129	107	86%	107	24,000	119

Sources: BEIS Quarterly Prices; SHCS.

Note: All values indexed to 2012 = 100 with the exception of the fuel price index where both 2010 = 100 (lx) and 2012 = 100 (rebased) have been supplied.

Fuel poverty rates shown on BREDEM 2012 basis (new energy model).

EE ratings shown on SAP 2009 basis up to 2013, SAP 2012 (RdSAP v9.92) basis between 2014 and 2017 and SAP 2012 (RdSAP v9.93) basis from 2018.

4.4.1 Fuel Costs

178. BEIS publish quarterly energy prices data on the price of key fuels which enables us to construct time series for the price of fuels for the average Scottish household over the longer term. For further information on the data sources which feed into these National Statistics and the quality assurance processes undertaken see the BEIS domestic energy prices guidance document.

179. Using information from the SHCS about the fuels used for space and water heating we can weight the published national quarterly fuel price indices, BEIS QEP Table 2.1.3, and produce an average index value for the price of the heating fuel requirement for Scotland. The results are shown in Figure 22 and Table 33.

180. Since the majority of Scottish households heat their properties with gas (81%), the national average index follows the gas index closely. In 2015 and 2016 the average index fell by 5.6% and 5.4%, respectively, primarily due to the falling price of liquid fuels (oil) and gas. In 2017 and 2018 the average index grew by 1.2% and 5.4%, respectively, mostly driven by electricity (up 8.7% in 2018) and liquid fuels (up 25.3% in 2018).

181. In 2019, the fuel price index grew again by 0.7%. The largest increases were in electricity (up 7.3%), solid fuels (3.6%) and other domestic fuels (3.8%). The average index for liquid fuels fell by 2.6% compared to 2018.

Table 33: BEIS Current Fuel Price Indices and a Weighted Average for Scotland: 2012 - August 2020

Year	Current fuel price indices
	Gas	Electricity	Liquid fuels	Solid fuels	Other fuels	Weighted Average
2012	122.5	113.4	130.5	108.6	118.7	121.5
2013	131.9	121.7	130.8	110.2	127.2	130.2
2014	138.2	128.5	116.0	113.2	132.8	135.2
2015	131.9	128.0	81.8	113.5	128.4	127.6
2016	124.1	127.7	72.9	113.3	124.6	120.7
2017	122.8	136.3	90.4	115.9	129.3	122.1
2018	127.4	148.1	113.3	117.9	138.0	128.5
2019	126.9	158.9	110.3	122.1	143.3	129.4
to Aug 2020	118.1	160.4	78.8	126.4	139.1	120.7

Note: BEIS Quarterly Energy Prices, Table 2.1.3. Indices supplied with 2010 = 100.

Weighted average based on SHCS heating fuel use proportions, 2012 to 2019. 2020 proportions assumed unchanged from 2019.

182. BEIS has published fuel price data up to August 2020. As fuel use changes slowly, we assume that the fuel mix in Scotland in 2020 was the same as captured by the 2019 SHCS in order to extend the weighted average for Scotland into 2020. Into the third quarter of 2020 the weighted average of heating fuels falls, driven primarily due to the falling price of liquid fuels (down 28.5%) and gas (down 6.9%). This amounts to an approximate 6.8% decrease in the composite price on average 2019 levels to August 2020.

4.4.2 Household Income

183. The SHCS is not designed to capture income as comprehensively as other formal surveys of income and is collected on a self-reported basis. From 2018, total household income, including the income of other adults, has been collected in the survey. However, in order to provide a consistent time series of fuel poverty estimates for 2012 to 2019, we have only taken account of income from the highest income householder and their partner. We plan to introduce income from other household members, along with other developments under the new definition, in future years.

184. Income is reported in nominal terms and is not equivalised to take into account that households of different size and composition need different levels of income to sustain the same living standard. Figures in this section therefore may not align with official statistics on household income and inequality.

185. In 2019, 50% of households earned £24,300 or more after tax, higher than the £23,300 in 2018 (Table 34). This equates to an increase in median income of 4%. Since 2012, median income has increased by 19% (around £4,000) in nominal terms.

186. The mean income of surveyed households was higher in 2019 (around £29,900) than 2018 (£28,600). This equates to an increase in mean income of 4%. Percentage change in income between years varied across income deciles. Increases in income ranged between 1% in deciles 1 and 8 to 6% in deciles 3 and 10. There were no decreases in income for any decile group.

Table 34: Mean Annual Income in Each Decile Group, SHCS 2018 and 2019

Income Decile	Year		Percentage change
	2018	2019
1	£7,000	£7,100	1%
2	£11,900	£12,400	4%
3	£14,700	£15,600	6%
4	£17,900	£18,700	5%
5	£21,300	£22,300	4%
6	£25,400	£26,600	5%
7	£31,000	£32,000	3%
8	£38,200	£38,700	1%
9	£47,300	£49,100	4%
10	£71,500	£76,000	6%
All	£28,600	£29,900	4%
Median	£23,300	£24,300	4%
Sample Size	2,905	2,950

4.4.3 Housing Stock

187. As shown in Table 35, the mean modelled energy consumption required to meet the fuel poverty heating regime (see Section 4.1.1) in 2019 was 28,427 kWh, which is similar to 27,795 kWh in 2018.

188. Over the same time period, mean running costs have significantly increased by 6.7% from £1,710 in 2018 to £1,825 in 2019, which reflects the increase in modelled energy requirement and overall increase in domestic fuel prices in 2019.

Table 35: Modelled Annual Energy Consumption and Running Costs, 2012- 2019

Year	Energy requirement		Running Costs		Sample Size
	Mean (kWh)	Annual change	Mean (£)	Annual change
2012	29,621	-	1,727	-	2,787
2013	28,964	-2.2%	1,860	7.7%	2,725
2014	29,195	0.8%	1,898	2.1%	2,682
2015	29,068	-0.4%	1,745	-8.1%	2,754
2016	28,286	-2.7%	1,611	-7.7%	2,850
2017	28,257	-0.1%	1,665	3.4%	3,002
2018	27,795	-1.6%	1,710	2.7%	2,964
2019	28,427	2.3%	1,825	6.7%	2,997

Note: Fuel poverty energy requirement modelled on the following basis: 2012 - 2013: BREDEM 2012 v.1.0; 2014 -2018: BREDEM 2012 v.1.1. Fuel poverty costs as follows: 2012 include WHD adjustment only; from 2013 onwards include WHD and price source adjustments; from 2016 an improvement is included by assigning pre-payment metered fuel prices to the relevant households; from 2019 further improvements are included by using more detailed information on combi boilers to improve the accuracy of calculations surrounding hot water losses and assigning an off-peak tariff to relevant household's lights and appliances fuel prices.

4.4.4 Impact on Fuel Poverty

189. To understand how the changes in the price of domestic fuels and the incomes of the households included in the SHCS sample interact with the performance of the housing stock, we carried out a micro-simulation which sought to isolate the impact of each set of factors on the level of fuel poverty recorded in 2019. The results are illustrated in Figure 23.

190. The analysis which underpins these findings uses SHCS data from 2018 and 2019 to model hypothetical rates of fuel poverty under different scenarios, adding one change at a time. This included the following steps as shown in Table 36.

• First, 2019 fuel prices were applied to the 2018 survey sample to determine the effect of price change alone under 2018 levels of energy demand and household income.
• Next, the income of households in this sample was updated by the mean change observed for their decile group between 2018 and 2019. This demonstrated the additional effect of income changes on fuel poverty between 2018 and 2019.
• We then compare the fuel poverty rate modelled at the previous step with the estimate for 2019. The difference is estimated to be the effect of the energy performance of the housing stock and other sampled housing stock changes between 2018 and 2019.^[18]

Table 36: Steps in Attributing Change in the Fuel Poverty Rate between 2018 and 2019

	Fuel Poverty Rate	Step Difference
Fuel Poverty 2018	25.0%
Step 1: Fuel change	26.6%	1.6 points
Step 2: Income change	23.8%	-2.8 points
Step 3: Attributed to changes in the housing stock	24.6%	0.8 points
Fuel Poverty 2019	24.6%

191. The net change of 0.4 percentage points in the fuel poverty rate between 2018 and 2019 was not statistically significant. The results from the micro-simulation analysis indicate that changes in fuel prices and income would affect the fuel poverty rate differently. Applying fuel price changes increased the fuel poverty rate by 1.6 percentage points whilst applying income changes decreased the fuel poverty rate by 2.8 percentage points.

192. The residual change is attributed to differences in energy efficiency performance, changes in the housing stock as described in section 4.4.3 and other underlying changes to the sampled stock distribution, increasing the rate by 0.8 percentage points.

4.5 Characteristics of Fuel Poor Households

193. Figure 24 illustrates some of the key attributes of the fuel poor population in 2019. Approximately half (48%) of fuel poor households are other households (without children or older members). Around 16% of households living in fuel poverty are families with children, and 36% are older households.

194. 44% of fuel poor households are owner occupiers, 38% are social housing residents and the remaining 18% rent in the private sector. 57% of fuel poor households live in houses - of which 17% are detached properties, 18% semi-detached, and 23% terraced - with the remaining 43% occupying flats.

195. One fifth (20%) of the dwellings of fuel poor households were built before 1919, and 23% were built since 1982. The remaining 58% were constructed in the intervening years.

Figure 24: Composition of Fuel Poor Households by Selected Household and Dwelling Characteristics, 2019

4.5.1 Household Characteristics

196. Table 37 shows fuel poverty rates by a number of household characteristics for 2019 and in comparison to the previous year.

197. Overall rates of fuel poverty differed between the social (37%) and private sector (20%) in 2019. However, looking at tenure in a more disaggregated way shows that rates of fuel poverty in the housing association (39%), local authority (36%) and private rented sectors (36%) are similar. In comparison, 12% of those with a mortgage are assessed to be fuel poor. These are similar rates to those in 2018.

198. As in 2018, older households (27%) and other households (27%) in 2019 have a higher fuel poverty rate than families (17%).

199. Fuel poverty has a strong association with income and households in the lower income bands have the highest rates of fuel poverty: 96% for the bottom income band and 60% for the 2^nd bottom band. Fuel poverty rates across income bands are similar to 2018 fuel poverty rates.

200. Fuel poverty rates generally decrease as council tax bands increase from A (35%) to F (14%) and G-H (16%). Fuel poverty rates across all council tax bands are similar to 2018.

Table 37: Fuel Poverty Rates by Household Characteristics, 2019 and 2018

	2019			2018
	000s	%	Sample	000s	%	Sample
Tenure
Owned outright	186	21%	1,133	193	23%	1,065
Mortgaged	82	12%	803	74	10%	840
LA/ public	131	36%	418	160	39%	447
HA/co-op	104	39%	286	97	39%	266
PRS	110	36%	310	97	36%	287
Private	378	20%	2,246	363	20%	2,192
Social	235	37%	704	256	39%	713
Household type
Older households	218	27%	1,029	221	28%	950
Families	100	17%	702	94	17%	664
Other households	294	27%	1,219	304	27%	1,291
Weekly Household Income
< £200	222	96%	272	242	95%	281
£200-300	234	60%	448	235	55%	480
£300-400	119	29%	491	98	24%	464
£400-500	25	8%	358	35	12%	344
£500-700	*	*	530	8	2%	506
£700+	*	*	851	1	0%	830
Council Tax Band
Band A	175	35%	579	174	33%	587
Band B	163	29%	649	178	32%	642
Band C	90	23%	465	95	23%	477
Band D	61	19%	405	70	22%	386
Band E	70	20%	440	57	18%	392
Band F	27	14%	213	31	14%	269
Band G - H	27	16%	196	15	12%	152
All Scotland	613	24.6%	2,950	619	25.0%	2,905

Note: A * indicates suppressed data due to low sample sizes. There were 3 cases in 2019 with a missing council tax band which have been excluded from the table but included in the Scotland statistics.

4.5.2 Dwelling Characteristics

201. Table 38 shows how the level of fuel poverty varies across dwelling characteristics.

202. Fuel poverty rates are lowest for detached households (18%). The lowest rates of fuel poverty are associated with higher energy efficiency standards. 20% of households living in post-1982 dwellings and 20% of households living in dwellings rated C or better were fuel poor. Both of these categories have similar rates to their respective 2018 levels.

203. Households using gas (22%) as their primary heating fuel have similar fuel poverty levels to that in 2018 (23%). Consequently, the rates of fuel poverty for households within coverage of the gas network and for urban households (24% for both) have remained similar to rates in 2018 (25% for both on grid and urban).

204. In 2019, the fuel poverty rate for rural (29%) households was higher than for urban (24%) households. Levels of fuel poverty for remote rural households are higher than for all other urban rural locations and have increased by 9 percentage points from 33% in 2018 to 43% in 2019. This increase reflects the high proportion of rural households which use electricity and other fuel types (such as solid mineral fuels; Table 7) as their primary fuel type and the associated increase in fuel prices for these fuel types between 2018 and 2019, as discussed further in section 4.4.1.

205. Fuel poverty rates for all other dwelling characteristics have remained similar between 2018 and 2019.

206. Levels of fuel poverty among households using electricity as their primary heating fuel have remained the highest, at 43%, compared to households using gas (22%), oil (28%) and other fuel (31%) as their primary heating fuel.

207. A higher proportion of households in the 15% most deprived areas (based on SIMD) were in fuel poverty compared to other areas of Scotland, 32% compared to 23% respectively.

208. A higher proportion of households with a pre-payment meter (PPM; electricity, gas or both) were in fuel poverty compared to those without a PPM, 36% compared to 22% respectively.

Table 38: Fuel Poverty by Dwelling Characteristics, 2019 and 2018

	2019			2018
	000s	%	Sample	000s	%	Sample
Dwelling Type
Detached	106	18%	838	94	17%	793
Semi	108	22%	674	112	22%	647
Terraced	139	26%	583	138	26%	626
Tenement	175	30%	480	175	31%	496
Other flats	86	27%	375	100	32%	343
Age of dwelling
pre-1919	121	25%	539	121	26%	512
1919-1944	68	25%	301	78	28%	318
1945-1964	142	27%	630	153	29%	643
1965-1982	144	26%	693	142	27%	646
post-1982	138	20%	787	125	19%	786
Primary Heating Fuel
Gas	442	22%	2,219	468	23%	2,189
Oil	36	28%	267	33	22%	257
Electric	113	43%	370	106	43%	386
Other	22	31%	94	13	24%	72
EPC Band (SAP 2012)
B - C	221	20%	1,201	201	19%	1,104
D	271	27%	1,230	295	29%	1,240
E	76	31%	361	87	30%	407
F - G	45	40%	158	36	35%	154
Location (2013/14 urban rural classification)
Large urban areas	228	26%	799	222	25%	803
Other urban areas	186	21%	988	205	24%	981
Accessible small towns	43	19%	282	54	24%	275
Remote small towns	31	34%	174	27	31%	183
Urban overall	488	24%	2,243	508	25%	2,242
Accessible rural	60	22%	350	62	23%	332
Remote rural	64	43%	357	49	33%	331
Rural overall	125	29%	707	111	27%	663
SIMD: Most deprived 15% (SIMD 2016)
No	484	23%	2,565	483	23%	2,521
Yes	129	32%	385	136	33%	384
Gas Grid
On	501	24%	2,239	515	25%	2,190
Off	112	27%	711	104	23%	715
Pre-payment Meter
No	458	22%	2,488	439	22%	2,405
Yes	154	36%	460	178	38%	496
All Scotland	613	24.6%	2,950	619	25.0%	2,905

Note: There was one N/A response for primary heating fuel in 2018 which has been excluded from the table but included in the Scotland statistics. There were 2 cases in 2019 and 4 cases in 2018 with unobtainable pre-payment meter values which have been excluded from the table but included in the Scotland statistics.

4.6 Characteristics of Extreme Fuel Poor Households

209. Over half (54%) of extreme fuel poor households are adults without children. Around 9% of households living in extreme fuel poverty are families with children, and 37% are older households.

210. Almost half (49%) of extreme fuel poor households are owner occupiers, 30% are social housing residents and the remaining 22% rent in the private sector. 60% of extreme fuel poor households live in houses - of which 25% are detached properties, 15% semi-detached, and 19% terraced - while the remaining 40% occupy flats.

211. Just under a third (28%) of the dwellings of extreme fuel poor households were built before 1919, and 21% were built since 1982. The remaining 51% were constructed in the intervening years.

4.6.1 Household Characteristics

212. Table 39 shows extreme fuel poverty rates by a number of household characteristics for 2019 and in comparison to the previous year.

213. Overall rates of extreme fuel poverty were similar between the social (14%) and private sector (12%) in 2019. The highest rates of extreme fuel poverty by tenure are found in the private rented sector where 22% are extreme fuel poor. In comparison, 5% of those with a mortgage are assessed to be extreme fuel poor. Overall rates by tenure in 2019 were similar to that in 2018.

214. As in 2018, older households (14%) and other households (15%) have a higher extreme fuel poverty rate than families (5%) in 2019.

215. As with fuel poverty overall, extreme fuel poverty has a strong association with income. Households in the lowest income band (<£200 a week) have the highest rate of extreme fuel poverty (74%) whereas there are no cases of extreme fuel poverty in the highest income band (£700+ a week).

216. Extreme fuel poverty rates in the second lowest income band (£200-£299.99 a week) have increased in 2019 (25%) compared to 2018 (16%). Extreme fuel poverty rates across all other income bands are similar to 2018.

217. In 2019, extreme fuel poverty rates across council tax bands ranged from 9% in council tax band F to 16% in council tax band A.

Table 39: Extreme Fuel Poverty Rates by Household Characteristics, 2019 and 2018

	2019			2018
	000s	%	Sample	000s	%	Sample
Tenure
Owned outright	116	13%	1,133	110	13%	1,065
Mortgaged	36	5%	803	29	4%	840
LA/ public	54	15%	418	61	15%	447
HA/co-op	38	14%	286	27	11%	266
PRS	67	22%	310	52	19%	287
Private	219	12%	2,246	191	10%	2,192
Social	92	14%	704	88	13%	713
Household type
Older households	116	14%	1,029	102	13%	950
Families	27	5%	702	32	6%	664
Other households	167	15%	1,219	145	13%	1,291
Weekly Household Income
< £200	171	74%	272	172	68%	281
£200-300	98	25%	448	67	16%	480
£300-400	33	8%	491	28	7%	464
£400-500	5	2%	358	*	*	344
£500-700	3	1%	530	*	*	506
£700+	-	-	851	-	-	830
Council Tax Band
Band A	82	16%	579	66	13%	587
Band B	71	13%	649	69	12%	642
Band C	44	11%	465	43	11%	477
Band D	32	10%	405	34	11%	386
Band E	42	12%	440	32	10%	392
Band F	16	9%	213	22	10%	269
Band G - H	22	13%	196	13	11%	152
All Scotland	311	12.4%	2,950	279	11.3%	2,905

Note: A * indicates suppressed data due to low sample sizes. A - indicates where there were no sampled cases. There were 3 cases in 2019 with a missing council tax band which have been excluded from the table but included in the Scotland statistics.

4.6.2 Dwelling Characteristics

218. Table 40 shows how the level of extreme fuel poverty varies across dwelling characteristics.

219. The lower rates of extreme fuel poverty are associated with higher energy efficiency standards. 9% of households living in post-1982 dwellings and 7% of households living in dwellings rated C or better were extreme fuel poor. Both of these categories have similar rates to their respective 2018 levels.

220. Extreme fuel poverty rates ranged across dwelling type, where semi-detached households (9%) had the lowest extreme fuel poverty rates compared to tenement flats (16%) with the highest.

221. Households using gas as the primary heating fuel have the same extreme fuel poverty levels as in 2018 (both 9%). Consequently, the rates of extreme fuel poverty for households within coverage of the gas network and for urban households (11% for both) have remained similar to rates in 2018 (10% for both).

222. Levels of extreme fuel poverty among households using electricity as their primary heating fuel have remained among the highest, at 33%, and are higher than for households using any other fuel as their primary heating fuel. In addition, households using oil as their primary heating fuel have higher fuel poverty rates than households using gas (21% compared to 9%). Consequently, the rates of extreme fuel poverty for households out with the coverage of the gas network (19%) are higher than for households within coverage of the gas network (11%).

223. Levels of extreme fuel poverty increased as EPC rating decreased, with 26% of households with an EPC rating of E and 38% of households with an EPC rating of F-G being extreme fuel poor.

224. Levels of extreme fuel poverty were higher in rural areas (19%) compared to urban areas (11%) in 2019. Fuel poverty rates were highest for remote rural households (33%) and lowest for other urban (9%) and accessible urban households (8%).

225. Levels of extreme fuel poverty for remote rural households have increased by 11 percentage points, from 23% in 2018 to 33% in 2019. Extreme fuel poverty rates for all other dwelling characteristics have remained similar between 2018 and 2019.

226. A higher proportion of households with a pre-payment meter (electricity, gas or both) were in extreme fuel poverty compared to those without a PPM, 18% compared to 11% respectively.

Table 40: Extreme Fuel Poverty by Dwelling Characteristics, 2019 and 2018

	2019			2018
	000s	%	Sample	000s	%	Sample
Dwelling Type
Detached	79	14%	838	63	11%	793
Semi	46	9%	674	53	11%	647
Terraced	60	11%	583	53	10%	626
Tenement	91	16%	480	71	12%	496
Other flats	35	11%	375	39	12%	343
Age of dwelling
pre-1919	88	18%	539	81	17%	512
1919-1944	33	12%	301	37	13%	318
1945-1964	62	12%	630	60	11%	643
1965-1982	64	12%	693	56	11%	646
post-1982	64	9%	787	44	7%	786
Primary Heating Fuel
Gas	186	9%	2,219	186	9%	2,189
Oil	27	21%	267	23	16%	257
Electric	86	33%	370	65	27%	386
Other	11	16%	94	5	10%	72
EPC Band (SAP 2012)
B - C	80	7%	1,201	59	6%	1,104
D	125	12%	1,230	121	12%	1,240
E	62	26%	361	65	23%	407
F - G	43	38%	158	34	34%	154
Location (2013/14 urban rural classification)
Large urban areas	116	13%	799	90	10%	803
Other urban areas	80	9%	988	82	9%	981
Accessible small towns	17	8%	282	21	9%	275
Remote small towns	16	17%	174	12	14%	183
Urban overall	228	11%	2,243	206	10%	2,242
Accessible rural	32	12%	350	39	14%	332
Remote rural	51	33%	357	34	23%	331
Rural overall	82	19%	707	72	17%	663
SIMD: Most deprived 15% (SIMD 2016)
No	257	12%	2,565	236	11%	2,521
Yes	54	13%	385	43	10%	384
Gas Grid
On	231	11%	2,239	212	10%	2,190
Off	80	19%	711	67	15%	715
Pre-payment Meter
No	234	11%	2,488	206	10%	2,405
Yes	75	18%	460	71	15%	496
All Scotland	311	12%	2,950	279	11%	2,905

Note: There was one N/A response for primary heating fuel in 2018 which has been excluded from the table but included in the Scotland statistics. There were 2 cases in 2019 and 4 cases in 2018 with unobtainable pre-payment meter values which have been excluded from the table but included in the Scotland statistics.

4.7 Fuel Poverty and Income Poverty

227. Although fuel poverty is correlated with low income, it is not equivalent to income poverty. This section updates previous analysis of how these two conditions relate in the household population under the current fuel poverty definition.

228. According to the official poverty definition, individuals are considered to be in relative (income) poverty if their equivalised net household income is below 60 per cent of the median income in the same year. Official poverty estimates are calculated using the Department for Work and Pensions' (DWP) Family Resources Survey (FRS). The latest estimates for Scotland were published on 26 March 2020 and relate to 2016/19.^[19]

229. It is possible to use the SHCS to determine how fuel poverty and income poverty relate, although there are some caveats to this approach. One of the main caveats is that the SHCS does not use the full range of household income data used to derive the official measure of poverty. For example, we have only taken account of income from the highest income householder and their spouse/partner.^[20] As a result, the SHCS would underestimate the income of households with more than two earners, and therefore over-estimate levels of income poverty. To correct to some extent for this we make a corresponding adjustment to the equivalisation method used for producing official poverty statistics. It is therefore important to note that the results presented here do not reproduce exactly the official measure of fuel poverty and are only approximate.

230. In this report, the adjustment has been applied to household income after housing costs (AHC) to better align with the new definition of fuel poverty. One caveat around this is that the definition of housing costs differs slightly between the SHCS and the DWP's Households Below Average Income (HBAI) statistics. The main difference is that here we deduct full mortgage payments, whereas HBAI deducts only mortgage interest payments. For the HBAI structural insurance premiums for owner occupiers, ground rent and service charges are also deducted.

231. A further caveat is that the latest published income poverty estimates relate to 2018/19. In order to derive a poverty threshold figure for 2019 we use the relationship between the SHCS and the FRS estimates of the median equivalised household income for the previous year, 2018. We adjust the 2019 SHCS median by the ratio between the two estimates observed in 2018 to obtain a 2019 poverty threshold. We estimate this as £282 per week AHC for a couple without children. The actual FRS 2018/19 poverty threshold of £268 is used for 2018 data.

232. As Table 41 shows, almost three-quarters of fuel poor households would be considered poor in terms of their income (73% or 448,000) while the other quarter have incomes above the relative poverty threshold (27% or 165,000 households) in 2019. This is a similar pattern to 2018.

233. Table 42 shows the fuel poverty rate by income poverty status. 86% of income poor households were fuel poor in 2019, a similar rate to 2018 (88%).

Table 41: Estimated Number and Proportion of Households by Fuel Poverty and Income Poverty Status, SHCS 2018 and 2019

			Income Poor	Not Income Poor	All	Sample Size
2018	Fuel Poor	000s	432	187	619
		Row %	70%	30%	100%	732
	Not Fuel Poor	000s	58	1,800	1,858
		Row %	3%	97%	100%	2,173
	All	000s	490	1,988	2,477	2,905
2019	Fuel Poor	000s	448	165	613
		Row %	73%	27%	100%	742
	Not Fuel Poor	000s	73	1,810	1,883
		Row %	4%	96%	100%	2,208
	All	000s	520	1,975	2,496	2,950

Table 42: Fuel Poverty Rate (%) by Income Poverty Status, SHCS 2018 and 2019

		2018	2019
Income Poor	%	88%	86%
	Sample size	551	596
Not Income Poor	%	9%	8%
	Sample size	2,354	2,354
All	%	25.0%	24.6%
	Sample size	2,905	2,950

234. Figure 25 sets out this information graphically. This chart demonstrates, that while low income is associated with fuel poverty, it is not equivalent. Over a quarter of fuel poor households would not be considered income poor. Similarly, there are some income poor households who are unlikely to be struggling with their fuel bills with 8% of income poor households not being fuel poor.

Sample Size: 2,950

235. Table 43 provides further information about the characteristics of the households who fall into the different sub-groups.

236. Households that are both income poor and fuel poor tend to live in more energy efficient dwellings than other fuel poor households, potentially because of high energy efficiency standards in the social rented sector. They are more likely to use gas for heating, live on the gas grid and live in urban locations compared to other fuel poor households. These characteristics point to low income as a key reason for their experience of fuel poverty.

237. Conversely, households who are not income poor but experience fuel poverty have a higher likelihood of living in low energy efficiency properties, using electricity for heating, and living in rural areas compared to fuel poor and income poor households and Scotland overall.

Table 43: Household and Dwelling Characteristics by Income Poverty and Fuel Poverty, 2019

		Fuel, not Income Poor	Fuel & Income Poor	All Fuel Poor	Income, not Fuel Poor	All Scotland
EPC Band (SAP 2012)
B-C	000s	36	185	221	51	1,122
	col %	22%	41%	36%	70%	45%
D	000s	79	192	271	22	1,017
	col %	48%	43%	44%	30%	41%
E-G	000s	51	70	121	-	357
	col %	31%	16%	20%	-	14%
Household Type
Older	000s	67	151	218	19	819
	col %	41%	34%	36%	26%	33%
Families	000s	20	80	100	44	598
	col %	12%	18%	16%	61%	24%
Other	000s	77	217	294	9	1,079
	col %	47%	48%	48%	13%	43%
Urban-Rural (2013/14 urban rural classification)
Urban	000s	117	371	488	69	2,069
	col %	71%	83%	80%	94%	83%
Rural	000s	49	76	125	4	426
	col %	29%	17%	20%	6%	17%
Primary Heating Fuel
Gas	000s	95	347	442	71	2,035
	col %	57%	78%	72%	98%	82%
Oil	000s	13	23	36	*	130
	col %	8%	5%	6%	*	5%
Electric	000s	50	63	113	*	261
	col %	30%	14%	18%	*	10%
Other fuels	000s	7	15	22	*	70
	col %	4%	3%	4%	*	3%
Gas Grid
On grid	000s	117	383	501	68	2,075
	col %	71%	86%	82%	93%	83%
Off grid	000s	48	64	112	5	421
	col %	29%	14%	18%	7%	17%
Sample size		222	520	742	76	2,950

Note: A * indicates where data has been suppressed due to low sample numbers.