Consumer Vulnerability Strategy: Affordability

Consumers on low incomes and those in other vulnerable situations often feel the impact of high energy bills the most. Being unable to afford an accepted level of thermal comfort may have serious health and psychological consequences. We are aware of these affordability issues and are working to help those consumers struggling to manage their bills.

We collect and publish data on affordability as part of our work to make the energy market as transparent as possible.

Chart

Source: Ofgem calculations (ONS family spending data).

Information correct as of: October 2017

This graph shows the percentage of total household expenditure spent on energy. Total household expenditure includes housing costs and energy spend refers to spend on electricity, gas and other fuels. It gives figures for households in the lowest and highest 10% of incomes, as well as an average figure for all UK households.

Policy Areas:

  • Domestic consumers

Data Table

Energy spend as a percentage of total household expenditure (UK)

YearLowest 10%Highest 10%All households
199311.6%3.0%4.8%
199410.9%3.0%4.6%
199510.3%2.8%4.5%
19969.9%2.8%4.3%
19979.1%2.5%3.9%
19987.0%2.1%3.3%
19996.5%2.0%3.2%
20006.8%2.0%3.1%
20015.9%1.9%2.9%
20025.7%1.9%2.9%
20035.6%1.9%2.9%
20045.5%2.0%2.9%
20055.8%2.1%3.1%
20066.6%2.4%3.5%
20076.4%2.6%3.7%
20088.4%2.7%4.0%
20098.5%3.0%4.7%
20107.3%3.1%4.5%
20117.8%3.1%4.6%
20127.8%3.2%4.7%
201310.4%3.3%5.1%
20149.8%3.2%4.9%
20159.7%2.9%4.4%

More information

Energy spend as a percentage household expenditure: At-a-glance summary

In 2015, UK households were spending on average 4.4% of their total expenditure on energy, up from approximately 3% in the early 2000s. In 2015, households in the lowest income decile spent nearly 10% of their total expenditure on energy, up from approximately 5% in 2004. However, while the average share of energy spend in household budgets has increased since 2004, in 2015 it was at a similar level to that in 1996.

In 2015 the ONS changed how it reported data, from reporting the calendar year to the financial year. It reported both figures for 2014. The figure for 2014 are calendar year and the figure for 2015 is the 2015/16 financial year. 

Relevance 

Energy is an essential service required for health and wellbeing. Consuming below the level of accepted thermal comfort may have serious health consequences, while worrying about how to meet fuel bills can also have psychological effects

UKRN affordability study

Regulators acting in the energy, water, communications, health, legal and finance sectors joined together in March 2014 to form the UK Regulators’ Network (UKRN). This group aims to ensure effective cooperation across sectors where it can benefit consumers.

We led the UKRN affordability project which was aimed at exploring and understanding the cross sector affordability pressures on households and assessed whether a cross sectoral approach could deliver improved outcomes, relieving pressures from consumers.

We published analysis of the affordability pressures faced by consumers across different sectors. We also examined affordability factors which impact future bills and fares.

Through the publications and update feed below you can access our outputs produced in relation to affordability.

Publications and updates

  • Published: 1st Oct 2014
  • Reports and plans
  • 1 Associated documents
This research report provides views from our Consumer Panel on the affordability of household energy, in the context of household bills more widely. It also provides their views on the elements of their bills relating social and environmental schemes.

  • Published: 24th Jul 2012
  • Agendas, minutes and presentations
  • 3 Associated documents
Minutes from the June 2012 meeting of the Sustainable Development Advisory Group.

  • Published: 30th Mar 2012
  • Closed: 25th May 2012
  • Consultations and responses
  • 1 Associated documents
This paper outlines Ofgem’s intention to develop a new Vulnerable Consumers’ Strategy and seeks views on its themes and the need for different emphases in the future.

  • Published: 24th Mar 2009
  • Other
  • 1 Associated documents
This document provides an update on the actions in the Fuel Poverty Action Programme which came out at the Summit in April 2008

  • Published: 30th May 2008
  • Other
  • 1 Associated documents
The final fuel poverty action programme following Ofgem’s Summit on 23rd April.

  • Published: 24th Apr 2008
  • Other
  • 3 Associated documents
Draft Action Programme discussed at Ofgem’s Energy Summit Tackling Fuel Poverty, a fuller action plan will be published in early May.

  • Published: 29th Jun 2007
  • Reports and plans
  • 2 Associated documents
Factor 4 was originally devised as an initiative to tackle fuel poverty and financial exclusion through the development of community finance institutions.

  • Published: 31st Oct 2002
  • Consultations and responses
  • 1 Associated documents
This document summarises Ofgems further work on the quality of energy efficiency advice provided to domestic consumers.

  • Published: 27th Jun 2002
  • Reports and plans
  • 1 Associated documents
This study has been prepared for Ofgem by New Perspectives, with Taylor Nelson Sofres Mystery Shopping. The purpose of the study was to gain a full picture of the quality of energy efficiency advice which customers receive from suppliers.

  • Published: 5th Mar 2002
  • Reports and plans
  • 1 Associated documents
The Personal Finance Research Centre was commissioned to undertake empirical research to test the feasibility of a Factor Four approach to tackling fuel poverty.

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