Middle classes sucked into fuel poverty as prices soar

SPIRALLING energy bills have forced about a quarter of households into fuel poverty - including an increasing number of middle-class homes.

While the problem has previously affected those on lower incomes and pensioners, as many as 15 per cent of more affluent middle-class families are now also classified as fuel poor - which is defined as spending more than 10 per cent of household income on energy bills.

A study by uSwitch.com revealed that 6.3 million households in the UK were now classed as being in fuel poverty - and families with one stay-at-home parent and single, working parents were the worst affected.

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But the rising costs mean even people on higher incomes have started to feel the squeeze on their finances from fuel bills.

ScottishPower last month became the first of the UK's "big six" energy companies to hike its prices, sparking fears of a new round of increases across the board.

The average dual-fuel bill for both gas and electricity is set to rise by about 175 to 1,206.

Ann Robinson, director of consumer policy at uSwitch.com, said: "Rocketing energy prices mean that the middle classes are no longer immune to social ills such as fuel poverty.

"The fact is that we can now find the fuel poor amongst all walks of life and in all types of households."

The figures show that 44 per cent of working-class pensioners are struggling with fuel poverty, alongside 24 per cent of middle-class pensioners.

One in 50 households with an income of 30,000 or more is also classed as being in fuel poverty.

A consortium of bodies, led by Consumer Focus, has called for fuel poverty to be calculated after housing costs have been removed - which would send the proportion of homes living in fuel poverty up to a third.

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"Start to factor in housing costs such as mortgage and rental payments, and we are left with the shocking image of a third of all British households living in fuel poverty," Ms Robinson said.

"The sad truth is that consumers are paying a heavy price for this country's disjointed, incoherent and unaffordable energy policy."

Ofgem, the energy regulator, is currently carrying out a review of tariffs charged by the big six companies, which include ScottishPower, Scottish & Southern Energy and Scottish Gas, owned by Centrica.

All of the big six raised their prices over the winter, while energy prices are thought to have risen by 471, or 71 per cent, over the past five years - even before ScottishPower's latest price hike, which is due to take effect from 1 August.

The company increased its bills by an average of 19 per cent for its gas customers and 10 per cent for its electricity customers.The first price hike usually starts a domino effect involving the other major companies.

Yesterday, it emerged that the watchdog is to appoint accountants to analyse the wholesale energy prices paid by the big six suppliers, after it was discovered there was a 27 per cent difference in how much they paid for electricity and a 15 per cent difference for gas last year.

ScottishPower blamed its most recent hike on a prolonged rise in wholesale energy costs, which has pushed the average wholesale price up 30 per cent since November.

USwitch said that if housing costs were taken into account, almost half - 47 per cent - of working-class families would be in fuel poverty and about a quarter of middle class homes. "These are truly shocking statistics," said Lucy McTernan, chief executive of Citizens Advice Scotland. "And I'm afraid they are borne out by the evidence from Scottish Citizens Advice Bureaux."

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She went on: "The uSwitch report is right to say that the problem is affecting people from all backgrounds. But many of the people who are worst affected are those who are most vulnerable to begin with - including pensioners, and people who are unemployed, sick and disabled. And, of course, here in Scotland, the implications are particularly bad for those unable to heat their homes properly through the cold winters."

Ms McTernan added: "The cost of living is going up right across the board, and ever-increasing fuel bills are putting a lot of pressure on Scottish households.

"We simply can't have a situation, in the year 2011, where so many of our people are unable to afford an adequate supply of fuel."

Experts have warned that the number of people who suffer from fuel poverty is likely to rise still further, as energy companies continue to hike bills and consumers become increasingly strapped for cash amid public-sector job cuts.

Trisha McAuley, deputy director and energy expert at Consumer Focus Scotland, sees no light at the end of the tunnel.

She said: "With little sign of energy prices reducing, combined with reduced household incomes, it is inevitable that the number of people falling into fuel poverty - however you define it - will continue to increase.

She added: "The worrying new development is that ScottishPower, when it put up its prices last month, achieved much of the substantial increase by putting up its standing charges - the fixed amount you have to pay regardless of how much energy you use.

"This approach puts consumers in a new trap: even if they manage to reduce the amount they use, they'll still not save money."

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