Scottish House Condition Survey: 2023 Key Findings
Figures from the 2023 survey, including updated fuel poverty rates, energy efficiency ratings, the condition of housing and the Scottish Housing Quality Standard.
3 Fuel Poverty
Key Points
- In 2023, 861,000 households (34% of all households) were estimated to be in fuel poverty, of which 491,000 (19.4% of all households) were in extreme fuel poverty. This is higher than the 2022 estimates of 31% (780,000 households) for fuel poverty but similar for extreme fuel poverty 18.5% (465,000 households).
- The actual median fuel poverty gap for fuel poor households in 2023 was £1,250. This is similar to the median fuel poverty gap from 2022 of £1,240.
- The median fuel poverty gap (adjusted for 2015 prices) for fuel poor households was £960. This is similar to the adjusted gap in 2022 of £1,020.
- Overall rates of fuel poverty differed between the social (61%) and private sector (25%). Similarly, households in the social sector were more likely to be in extreme fuel poverty (32%) compared to households in the private sector (15%).
- 52% of households using electricity as their primary heating fuel were fuel poor, higher than households using gas (32%), and oil (26%). But similar to households using other fuel types (49%) as their primary heating fuel.
- 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; 57% compared to 31% respectively.
- Fuel poverty and extreme fuel poverty have a strong association with income, with rates increasing as annual household income decreases. For example, 96% of households with an annual income less than £15,000 were in fuel poverty compared to 58% of households earning between £15,000 and £24,999 annually.
- For both fuel poor and extreme fuel poor households, the lowest rates of fuel poverty are associated with higher energy efficiency standards. 32% of households living in dwellings rated EPC band C or better were fuel poor, compared to 48% living in dwellings in bands F or G.
- Although low income is associated with fuel poverty, it is not equivalent. 69% of fuel poor households were also income poor in 2023 whilst the other 31% would not be considered income poor.
-
Following the 2022 census the National Records of Scotland (NRS) revised their household estimates for the 2012 to 2022 period. For Scotland as a whole there was a downward revision which increased over time, from 0.2% in 2012 (-3,590 households) to 1.4% (-34,478 households) in 2022. In order to account for this we have updated the time series estimates in our tables in this publication to incorporate the revised 2012 to 2022 household estimates. Therefore direct comparisons with reported household figures in previous SHCS Annual Reports and this report should not be made. See section 1.1.6 of the methodological and technical notes for a full description.
3.1 Definition and Measurement of Fuel Poverty
Under the Housing (Scotland) Act 2001 (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.
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.
This was followed by The Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020 which received royal assent in February 2020 and defined the heating regimes to be used in the measurement of fuel poverty.
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 net income (after housing costs), and if after deducting fuel costs, benefits received for a care need or disability 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 (RRRSTI) areas.
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.
It is important to note that households in extreme fuel poverty are also considered to be in fuel poverty and consequently represent a subset of the total number of fuel poor households.
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[1] 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.
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 would be in fuel poverty
- no more than 1% of households in Scotland would be in extreme fuel poverty
- the median fuel poverty gap of households in Scotland in fuel poverty would be no more than £250 at 2015 prices (adjusted to take account of changes in the value of money).
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 came into force on the 26th February 2020. These regulations set out the types of households to which the enhanced heating regimes are appropriate and specify a person who is to determine the uplifts to the UK MIS for households living in Remote Rural Area, Remote Small Town and Island (RRRSTI) areas.
The estimates in this report include an uplift to the UK MIS for households living in RRRSTI areas, as determined by the Centre for Research in Social Policy, Loughborough University. The uplifts that were applied to the UK MIS for households in RRRSTI are based on those reported in The Cost of Remoteness: Reflecting higher living costs in remote rural Scotland. The uplifts range from 14% to 31% depending on household type and location. A full breakdown of the uplifts is shown in Table 3.1.
The UK MIS values used in this report are based on the full 107 MIS household budgets for detailed family types provided by Loughborough University[2] [3]. Under this approach each household receives a MIS value based on the characteristics of the household including the age of the adults and children, and if adults in the household are in a relationship.
For statistics in this publication heating regimes are set based on the Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020, which specifies the households for which enhanced heating temperatures and/or hours are appropriate.
Enhanced heating temperatures are 23°C in the living room and 20°C in other rooms.
Standard heating temperatures are 21°C in the living room and 18°C in other rooms.
Enhanced heating hours are 16 hours a day during the week and at the weekend.
Standard heating hours are 9 hours a day during the week and 16 hours a day during the weekend.
A satisfactory heating regime is defined as follows.
Enhanced heating temperatures and enhanced heating hours (enhanced heating regime 1) are appropriate for households where the dwelling is frequently occupied during the morning or afternoon or both on weekdays by any member of the household when it is cold and any member of the household meets one or more of the following criteria: is aged 75 or over; has a long-term sickness or disability; or is in receipt of benefits received for a care need or disability.
Enhanced heating temperatures and standard heating hours (enhanced heating regime 2) are appropriate for households where the dwelling is not frequently occupied during the morning or afternoon or both on weekdays by any member of the household when it is cold and any member of the household meets one or more of the following criteria: is aged 75 or over; has a long-term sickness or disability; or is in receipt of benefits received for a care need or disability.
Standard heating temperatures and enhanced heating hours (enhanced heating regime 3) are appropriate for households where the dwelling is frequently occupied during the morning or afternoon or both on weekdays by any member of the household when it is cold and any member of a household has a child aged 5 years old or under and the household is not a household for which enhanced heating regimes 1 or 2 are appropriate.
For all other households, standard heating temperatures and standard heating hours (the standard heating regime) apply.
Although space heating is the largest component of the energy spend 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.
The majority of modelled energy use is for space heating.
Figure 3.1: Mean Modelled Household Energy Consumption by End Use
Description of figure 3.1
Figure 3.1 shows that, on average, around 74% of the modelled household energy demand was from space heating, 12% from water heating, 11% from lighting and appliance usage, and 3% was accounted for by cooking.
Data Source: Table FP1 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
The energy costs of maintaining a satisfactory heating regime and other uses of energy are modelled using data from the physical inspection of dwellings, the household interview conducted as part of the SHCS, as well as information on consumer fuel prices. Gas and electricity prices are regulated by the Ofgem price cap, and from January to June 2023 were also limited by the Energy Price Guarantee (EPG) in response to the cost of living crisis. In 2023 under the price cap and energy price guarantee gas prices varied from a low of 6.5 p per kwh under the October to December price cap to a high of 9.79 p per kwh in from January to March under the EPG. Similarly, electricity prices varied from a low of 26 p per kwh under the October to December price cap to a high of 32.3 p per kwh in from January to March under the EPG[4].
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.
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 meter users, who are more common among lower income groups which are at higher risk of fuel poverty. In the 2023 SHCS, 13% of households had a pre-payment meter (mains gas, electricity, or both).
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.
Secondly, a household’s lights and appliances are now assigned as using an off-peak tariff if an off-peak 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 3.1 shows that, on average, around 11% of the modelled household energy demand was from lighting and appliance usage.
The cost of the energy requirement includes an allowance for the bill rebate provided under the Warm Home Discount (WHD) scheme[5]. It no longer includes the £12 contribution of the Government Electricity Rebate (GER) as the scheme only ran for two years (2014 and 2015).
From 2021 onwards, the BRE Domestic Energy Model (BREDEM) used to model fuel poverty energy consumption and annual running costs used postcode district-level external weather data, whereas previously this was based on regional data. This means that colder more exposed households may require more energy to keep their homes warm, while households in more sheltered or warmer locations may need less. For further details see the Technical Notes and Definitions.
Additionally, from 2021 methodological changes were implemented to allow fuel poverty estimates to fully met the definition of fuel poverty as laid out in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019, The Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020, and The Fuel Poverty (Additional Amount in respect of Remote Rural Area, Remote Small Town and Island Area) (Scotland) Regulations 2020. This included: Placing households on one of 4 heating regimes as laid out in The Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020, using the full 107 Minimum Income Standard (MIS) Household budgets produced by Loughborough University, Including childcare costs, using the income of all household members, and including imputed housing costs[6].
For 2023, the calculation of fuel poverty also includes an adjustment to household income and energy bills to account for the cost of living payments in 2023. This includes the £900 Cost of Living Payment for households on means tested benefits, the £150 Disability Cost of Living Payment for members of a household in receipt of select disability benefits, the £300 Pensioner Cost of Living Payment for households in receipt of Winter Fuel Payment, which were added to eligible households income. As well as the £201 applied to household energy bills as part of the Energy Bill Support Scheme[7] (EBSS). (See Section 1.5.2, 1.5.3, and 1.6 of the methodological notes for full details)
3.2 Fuel Poverty and Extreme Fuel Poverty
In 2023, an estimated 34.0% of all households were in fuel poverty, around 861,000 households (see Table 3.2). Higher than the 31.0% seen in 2022.
Around 491,000 of these households (19.4% of all households) were living in extreme fuel poverty (see Table 3.2). Similar to 2022.
34% of households were in fuel poverty in 2023
Fuel poverty has risen since 2022
Figure 3.2: Estimates of Fuel Poverty and Extreme Fuel poverty since 2012
Data Source: Table FP4 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
Notes: [note 7]
3.3 Fuel Poverty Gap
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. The fuel poverty gap is 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.
The median fuel poverty gap in 2023 was £1,250
In 2023 the median fuel poverty gap for fuel poor households was £1,250 (Table 3.3). This is similar to the median fuel poverty gap from 2022 of £1,240.
The median fuel poverty gap (adjusted for 2015 prices) for fuel poor households was £960. This is similar to the adjusted median fuel poverty gap from 2022 of £1,020.
3.4 Drivers and Trends
Fuel poverty is affected by levels of household income, the price of fuel required for space and water heating, the energy efficiency of the dwelling, and the required use of fuel by households to maintain satisfactory heating regimes. Fuel poverty is distinct from poverty in that, while low income is an important driver, it is not a prerequisite. As shown in Figure 3.5 fuel poor households are found in all income bands. In 2023 around 17% of all fuel poor households had an after housing costs income above £25,000 annually, which places nearly all of these households in the top half of the income distribution (see Table FP8 in the Excel tables).
Table FP4 in the Excel workbook shows indexes constructed to compare trends in three key drivers of fuel poverty since 2012 .
In the below sections we describe the changes observed in household income, fuel prices and energy efficiency (through energy consumption). As well as break down the impact that changes in each of these drives has had on the overall fuel poverty rate between 2022 and 2023.
3.4.1 Fuel Costs
DESNZ publish quarterly energy prices data on the price of key fuels which enables us to construct a time series of 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 DESNZ domestic energy prices guidance document.
Using information from the SHCS about the fuels used for space and water heating we can weight the published national quarterly fuel price indices, DESNZ QEP 2.13 and produce an average index value for the price of the heating fuel requirement for Scotland. Since the majority of Scottish households heat their properties with gas (81%), the national average index follows the gas index closely.
The weighted index price of fuel grew by 15.9% in 2023
Figure 3.3: Index prices of fuels 2016 to September 2024
Description of figure 3.3
As shown in Figure 3.3 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). 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. In 2020 the average index fell by 9.4% driven by falling gas prices (-10%) and liquid fuels (-30.1%) due to the Covid-19 pandemic. In 2021 the fuel pirce index grew by 2.4% due mainly to increases in liquid fuel prices (31.8%) however it remained 7% lower than 2019 levels. In 2022 the average index grew by 82.7% driven by an increase in all fuel types with gas 90%, and liquid fuels 86.5% showing the largest increases compared to 2021. Increases in gas prices were driven in part by uncertainties over the future Russian gas supply following the invasion of Ukraine.
In 2023 the average index continued to rise and grew by 15.9%, with gas showing the largest increase at 18.4% compared to 2022. However, the year on year changes show that the rise of the index is slowing, with liquid fuels decreasing by 20.2%.
DESNZ has published fuel price data up to September 2024. As fuel use changes slowly, we assume that the fuel mix in Scotland in 2024 was the same as captured by the 2023 SHCS in order to extend the weighted average for Scotland into 2024.
Into the third quarter of 2024 the weighted average of heating fuels has fallen compared to 2023, driven primarily due to gas (down 23.6%), and other domestic fuels (down by 17.2%) having decreased. This amounts to an approximate 22.1% decrease in the weighted composite price on index compared to 2023 levels. As seen in Figure 3.3 energy prices peaked between Quarter 4 of 2022 and Quarter 2 of 2023 before falling in Quarter 3 of 2023.
Data Source: Weighted Average-Table FP4 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’ and Individual fuels- DESNZ Domestic energy price indices
3.4.2 Household Income
The SHCS is not designed to capture income as comprehensively as other formal surveys of income and is collected on a self-reported basis. Income was previously collected on the highest income householder and their spouse. However, from 2018 a methodological improvement was implemented to collect total household income, including the income of other adults. For context, in the 2023 survey 12% of households interviewed (or 368 households) had a different total household income under this methodology, compared to the income of the highest income householder and their spouse. Due to this change in data collection, while we are able to provide a time series from 2012 for income data (Table FP4 excel files), all data prior to 2018 represents the income of the highest income householder and their spouse only. See Table FP 4 in SHCS 2023- Chapter 03 Fuel Poverty- tables and figures for a full time series of median household incomes from 2012.
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. However, household size and composition is accounted for in the fuel poverty calculation by assigning each household a MIS value based on their household characteristics (see Table 3.1 for range of MIS values). Figures in this section therefore may not align with official statistics on household income and inequality.
As discussed in Section 3.1 household income figures for 2023 also include the Cost of Living Payments received by eligible households[8] during the cost of living crisis.
Median household income was £30,400 in 2023
In 2023, 50% of households earned £30,400 or more after tax, higher than the £28,300 in 2022 (Table 3.4). This equates to an increase in median income of 7% compared to 2022.
The mean income of surveyed households was higher in 2023 (around £37,100) than 2022 (£34,500). This equates to an increase in mean income of 8%. Percentage change in income between years varied across income deciles. Increases in income ranged between 6% in decile 7 to 24%[9] in decile 1. There were no decreases in income for any decile group.
3.4.3 Housing Stock
As shown in Table 3.5b the mean modelled energy consumption in 2023 was 24,380 Kwh, 4% lower than the modelled consumption of 25,350 Kwh in 2022. This annual consumption is calculated based on households being placed on one of four heating regimes as described in section 3.1 above. The decrease is likley due to improvements in the energy efficiency of the Scottish housing stock. As shown in Table EE7a in ‘SHCS 2023- Chapter 02 Energy Efficiency- tables and figures’ 56% of Scottish homes had an EPC rating of C or better in 2023. This is an increase from 52% in 2022.
Over the same time period, mean running costs as shown in Table 3.5a have increased by around 12.3% from £2,810 in 2022 to £3,150 in 2023. This reflects the overall increase in domestic fuel prices, and the Ofgem price cap, observed between 2022 and 2023, and demonstrates the importance of fuel prices as a driver of fuel poverty rates. Mean annual running cost is calculated based on a household’s specfic fuel type, annual fuel costs (as discussed in section 3.1) and their specific heating regime. It does not incldue the impact of any government support such as the Energy Bill Support Scheme. If government support through the EBSS was included, the mean annual running costs for 2022 and 2023 would be £2,611 and £2,939, respectively. The annual change between 2019 and 2022 would be 43% and the annual change between 2022 and 2023 would be 13%.
Mean modelled annual running costs were £3,150 in 2023
Mean modelled annual energy consumption was 24,380 kwh in 2023
|
Year |
Mean KWh |
Annual change |
Sample size |
|---|---|---|---|
|
2012 |
29,620 |
2,787 |
|
|
2013 |
28,960 |
-2% |
2,725 |
|
2014 |
29,200 |
1% |
2,682 |
|
2015 |
29,070 |
0% |
2,754 |
|
2016 |
28,290 |
-3% |
2,850 |
|
2017 |
28,260 |
0% |
3,002 |
|
2018 |
27,790 |
-2% |
2,964 |
|
2019 |
28,430 |
2% |
2,997 |
|
2022 |
25,350 |
-11% |
2,983 |
|
2023 |
24,380 |
-4% |
3,151 |
3.4.4 Impact on fuel poverty
To understand how the changes in the price of domestic fuels and the incomes of the households included in the SHCS sample interact with other factors such as the performance of the housing stock, and housing costs, 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 2023. The results are illustrated in Figure 3.4
The analysis which underpins these findings uses SHCS data from 2023 and 2022 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 3.6
- First, 2023 fuel prices were applied to the 2022 survey sample to determine the effect of price change alone under 2022 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 2022 and 2023, and households were also assigned the 2023 MIS value for their household type. This demonstrated the additional effect of changes to income and household budgets needed for a decent standard of living on fuel poverty between 2022 and 2023.
Increases in fuel prices had the largest impact on the change in fuel poverty rate between 2022 and 2023
- We then compare the fuel poverty rate modelled at the previous step with the estimate for 2023. The difference is estimated to be the effect of other factors including the energy performance of the housing stock, changes to housing costs, and other sampled housing stock changes between 2022 and 2023[11].
Increases in fuel prices had the largest impact on the change in fuel poverty rate between 2022 and 2023
Figure 3.4: Contributions to Change in Fuel Poverty Rate Between 2022 and 2023.
Description of figure 3.4
The results from the micro-simulation analysis indicate that changes in fuel prices and changes in income and household budgets would effect fuel prices differently. Applying fuel price changes increased the fuel poverty rate by 4.4 percentage points whilst applying income and household budget changes decreased the fuel poverty rate by 2.4 percentage points. The fact that income has had a smaller effect than fuel prices in 2023 is largely the effect of increases in the MIS household budgets (ranging from 12% to 23%) counteracting increases to income (8% on average)
The residual change is attributed to other factors such as differences in energy efficiency performance, changes to housing costs, other changes in the housing stock as described in section 3.5.3 and other underlying changes to the sampled stock distribution. These factors combined to increase the rate by 0.9 percentage points.
Data Source: Table FP3 and Table FP5 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
Although average household energy efficiency has improved between 2022 and 2023 as shown in Table EE7a in ‘SHCS 2023- Chapter 02 Energy Efficiency- tables and figures’, which would generally reduce fuel poverty, this may have been outweighed by increases to housing costs which on average increased by 4% between 2022 and 2023 in the SHCS. This helps to explain why other factors combined to increase rather than decreased the fuel poverty rate.
3.5 Characteristics of Fuel Poor Households
Fuel poverty is affected by four key drivers: levels of household income, the price of fuel used to meet space and water heating requirements, the energy efficiency of housing, and the use of fuel in households[12]. The following sections present the fuel poverty rate broken down by three of these drivers (income, primary heating fuel used, energy efficiency) as well as other key household and dwelling characteristics. Tables FP15 and FP16 in the excel files show the composition of all fuel poor households broken down key dwelling and household attributes.
3.5.1 Household Characteristics
Figure 3.5 shows fuel poverty rates by a number of household characteristics.
Households earning under £15,000 had the highest rates of fuel poverty (96%)
Figure 3.5: Fuel Poverty Rates by Household Characteristics, 2023
Description of figure 3.5
Overall rates of fuel poverty differed between the social (61%) and private sector (25%). The highest rates of fuel poverty by tenure continue to be found in the rental sector where 61% of households renting from a local authority and 60% of households renting from a housing association are fuel poor. Similarly, 44% of private rented sector households are fuel poor. In comparison, only 15% of those with a mortgage and 25% of those who own outright are assessed to be fuel poor.
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 (less than £15,000 annually) and 58% for the 2nd bottom band (£15,000 - £24,999 annually) both of which represent an increase from 2022. For comparison, the fuel poverty rate for households earning between £35,000 and £44,999 annually was found to be 9%, which is similar ot the 2022 rate.
Fuel poverty rates generally decrease as council tax bands increase from band A (52%) to band F (18%) and bands G to H (22%).
Families (34%) have similar rates of fuel poverty to older households (37%), and other households (32%) . However, other households[13] have lower rates than older households.
Data Source: Table FP8 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
3.5.2 Dwelling Characteristics
Figure 3.6 shows how the level of fuel poverty varies across dwelling characteristics[14] .
Dwellings in remote rural areas had a higher rate of fuel poverty (44%) than all other areas except remote small towns (41%).
Figure 3.6: Fuel Poverty Rates by Dwelling Characteristics, 2023
Description of figure 3.6
The lowest rates of fuel poverty are associated with higher energy efficiency standards. 32% of households living in dwellings rated EPC band C or better were fuel poor compared to 48% of households living in dwellings rated EPC band F or G. Similarly, households living in dwellings built after 1982 had lower rates of fuel poverty (27%) compared to dwellings built between 1945 and 1964 (46%), which had the highest levels.
Detached houses had the lowest rates of fuel poverty, at 23%, despite having lower energy efficiency ratings than the national average (Figure 2.10), likely reflecting higher household incomes.
The fuel poverty rate for rural (35%) households was similar to the fuel poverty rate for urban (34%) households. However, the rate of fuel poverty for remote rural households (44%) is higher than all other areas except remote small towns (41%) which have a similar rate.
The rate of fuel poverty among households using electricity as primary heating fuel was 52%, higher than households using gas (32%), and oil (26%) as their primary heating fuel but similar to households using other heating fuels (49%). This reflects the higher per unit cost of electricity relative to gas, and oil.
A higher proportion of households in the 15% most deprived areas were in fuel poverty compared to other areas of Scotland; 51% compared to 31% respectively.
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; 57% compared to 31% respectively.
Data Source: Table FP8 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
Notes: [note 1] [note 2] [note 8]
3.6 Characteristics of Extreme Fuel Poor Households
3.6.1 Household Characteristics
Figure 3.7 shows extreme fuel poverty rates by a number of household characteristics.
Households earning under £15,000 had the highest rates of extreme fuel poverty (83%)
Figure 3.7: Extreme Fuel Poverty Rates by Household Characteristics 2023
Description of figure 3.7
Overall rates of extreme fuel poverty were higher in the social sector (32%) than in the private sector (15%).
As with fuel poverty overall, extreme fuel poverty has a strong association with income. Households in the lowest income band (<£15,000 annually) have the highest rate of extreme fuel poverty (83%) dropping to 2% for households in the £35,000 - £44,999 annual income band.
Similar to income, the highest rates of extreme fuel poverty are seen in the lowest council tax band with band A having an extreme fuel poverty rate of 27%. By comparison households in council tax band F have a rate of 13%.
Families have a lower rate of extreme fuel poverty (12%) than both older households (25%) and other households (19%)
Data Source: Table FP10 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
3.6.2 Dwelling Characteristics
Figure 3.8 shows how the level of extreme fuel poverty varies across dwelling characteristics[15] .
Dwellings in rural areas had higher rates of extreme fuel poverty (25%) than urban areas.
Figure 3.8: Extreme Fuel Poverty by Dwelling Characteristics 2023
Description of figure 3.8
Levels of extreme fuel poverty among households using electricity as their primary heating fuel were higher, at 40%, than households using oil (16%) or gas (17%) as their primary heating fuel but were similar to households using other fuels (34%).
The lowest rates of extreme fuel poverty are associated with higher energy efficiency standards. Only 15% of households living in dwellings rated EPC C or better were in extreme fuel poverty, compared to 22% for dwellings in band D, 32% for dwellings in band E and 46% in bands F-G.
Levels of extreme fuel poverty were higher in rural areas (25%) compared to urban areas (18%) in 2023.
Rates of extreme fuel poverty were higher in properties off the gas grid (27%) compared to dwellings on the gas grid (18%).
Data Source: Table FP11 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
Notes: [note 1] [note 2] [note 8]
3.7 Fuel Poverty and Income Poverty
Although fuel poverty is correlated with low income, it is not equivalent to income poverty. This section provides an analysis of how fuel and income poverty relate in the household population.
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 21 March 2024 and relate to 2022/23.
It is possible to use the SHCS to determine how fuel poverty and income poverty relate. The main caveat to note is that the SHCS is not designed to capture income as comprehensively as other formal surveys of income, e.g. the FRS. Household income is collected in the SHS on a self-reported basis. Therefore, figures in this section may not align with National Statistics on household income and inequality.
A further caveat is that the latest published income poverty estimates relate to 2022/23. In order to derive a poverty threshold figure for 2023 we use the relationship between the SHCS and the FRS estimates of the median equivalised household income for the previous year, 2022. We adjust the 2023 SHCS median by the ratio between the two estimates observed in 2022 to obtain a 2023 poverty threshold. We estimate this as £354 per week after housing costs (AHC) for a couple without children, while the actual FRS 2022/23 poverty threshold is £327.
As Table 3.7a shows, around two thirds of fuel poor households would be considered poor in terms of their income (69% or 591,000) while around one third have incomes above the relative poverty threshold (31% or 270,000 households).
Table 3.7b shows the fuel poverty rate by income poverty status. In 2023 93% of income poor households were fuel poor.
The majority of fuel poor households (69%) are also in income poverty
In 2023, 93% of income poor households are also fuel poor
|
Income Poverty Status |
Fuel Poverty |
Sample size |
|---|---|---|
|
Income Poor |
93% |
713 |
|
Not Income Poor |
14% |
2,391 |
|
All |
34% |
3,104 |
The majority of income poor households are in fuel poverty
Figure 3.9: Fuel Poor and Income Poor Households, SHCS 2023
Description of figure 3.9
Figure 3.9 is a Venn diagram which sets out this information graphically. As shown in the diagram the majority of fuel poor households (591,000) are also in income poverty. Conversely, 270,000 households are estimated to be fuel poor only (and not income poor), and 42,000 households are estimated to be income poor but not fuel poor.
This chart demonstrates, that while low income is associated with fuel poverty, it is not equivalent. Around 31% of fuel poor households (270,000 households) would not be considered income poor. Similarly, 2% of income poor households (42,000 households) would not be considered fuel poor.
Data Source: Table FP12 in ‘SHCS 2023- Chapter 03 Fuel Poverty- tables and figures’
Table 3.8 provides further information about the characteristics of the households who fall into the different sub-groups.
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.
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.
Households that are both income poor and fuel poor tend to live in more energy efficient dwellings than other fuel poor households.
[1] This includes amounts received for: Disability Living Allowance (DLA), Personal Independence Payments (PIP), Attendance Allowance (AA) and Severe Disablement Allowance (SDA)
[3] MIS budgets are updated annually based on a public consultation where groups are asked to identify goods and services that people need inside and outside the home to meet an acceptable living standard. New research is conducted yearly alternating between households without children and households with children. For a complete description of the MIS methodology see section 1 and 2 of the full report A Minimum Income Standard for the United Kingdom in 2023.
[4] The value given above represent the minimum and maximum of the Southern and Northern Scotland price regions for households using Other payment methods. Full price data under the EPG is available at Energy Price Guarantee, while Ofgem price data is available in Annex 9 at Energy price cap (default tariff) levels | Ofgem.
[5] Eligible households receive a £150 discount on their electricity bills. Households qualify if they receive the guarantee credit element of pension credit (core group) or they are on a low income and meet their energy supplier’s criteria (broader group).
[6] For a full description of methodological improvements for fuel poverty see Section 1.5.1 of the Methodology notes.
[7] Eligibility criteria for the £900 COL payment, £150 Disability COL payment and £300, pensioner COL payment is available at Cost of Living Payments 2022 to 2024 while details of the EBSS are available at Help with your energy bills. For the £900 COL payment households had £601 added to their income, as the remaining £299 was paid at the start of 2024 so will be included in the 2024 key findings report. The £201 payment applied to household energy bills as part of the EBSS represents the portion of the total £400 paid in 2023.
[8] In 2023 household income includes the Cost of Living payments paid to eligible households including: the £900 COL payment for households on means tested benefits, the £300 Pensioner COL payment paid to eligible pensioner households, and the £150 Disability COL paid to households with a member in receipt of disability benefits. For a full list of eligibility criteria see Cost of Living Payments 2022 to 2024. See Section 1.5.2, 1.5.3, and 1.6 of the methodological notes for full details on how cost of living payments were included in income.
[9] Although this is a large increase for incomes in decile 1 it is likely that this partially reflects the fact that incomes in decile 1 fell in 2020/2021 and 2021/2022 likely affected by the Covid-19 pandemic. Therefore this increase may partially be explained as a bounce back of income and not a direct increase. A similar trend was seen in ONS data when comparing 2023 and 2022 available at Disposable income estimate - Office for National Statistics.
[10] Annual consumption from 2012 to 2019 is calculated based on households being placed on one of the two heating regimes as defined in Fuel Poverty (Targets, Definition and Strategy)(Scotland) Act 2019 while estimates from 2022 reflect households being placed on one of the four heating regimes defined in The Fuel Poverty (Enhanced Heating) (Scotland) Regulations 2020.
[11] The sequence of steps in this method affects the size of the estimated impact. Where factors operate in the same direction any potential joined effect will be attributed to those assessed first.
[12] The use of fuel in a household impacts on a household's lived experience of fuel poverty, but does not affect the measurement of fuel poverty which considers the energy required to meet a the households statutory heating regime as set out in section 3.1, not the actual amount of energy used.
[13] Other households are specifically those all other households with adult residents (of any age) and no children. See section 2.2 of the Methodology Notes.
[14] As discussed in section 1.3 an error was found in the gas grid connection figures for 2021 and 2022. The impact on fuel poverty rates when broken down by gas grid coverage ranges from -1 to 8 percentage points. See section 2.4 of the Technical and methodological notes for more details.
[15] As discussed in section 1.3 an error was found in the gas grid connection figures for 2021 and 2022. The impact on extreme fuel poverty rates when broken down by gas grid coverage ranges from -0.5 to 8 percentage points. See section 2.4 of the Technical and methodological notes for more details.
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