How UK households have been coping with the energy crisis

Key findings

• New data estimates 13 million UK households are not turning the heating on even when it is cold.
• Households with lower annual incomes are more likely to not put the heating on with half of households on less than £20,000 (51%) not putting the heating on during cold weather compared to a third of households with annual incomes of more than £80,000 (32%). However, middle income households have also not been spared from the effects of the crisis.
• People who are in their mid-40s to mid-60s also tend to keep the heating off more than the oldest and youngest age groups. They do so at a rate of 1.5 times more than the youngest age group. 
• They face the risk of suffering from respiratory and cardiovascular diseases, which is even more concerning when four out of 10 people are worried that their ability to recover from illness is now worse than before the cost of living crisis.

Introduction

The UK’s energy crisis has left many households facing staggeringly high energy bills since April 2022. The sharp increase in energy prices resulted in people making various behavioural changes in attempts to cut down on their energy payments, despite the Energy Price Guarantee and government support on bills. 

Although energy prices have fallen over the past six months and are predicted to drop further, the price cap forecasts over the next year are still much higher than before the crisis took hold. Even then, the fall in these predictions are largely due to Ofgem updating its typical domestic consumption values*, and is likely to not have much impact on people’s energy bills.

*Typical Domestic Consumption Values are values devised by Ofgem of how much gas and electricity an average household uses per annum

Predicted price cap for the second half of 2023 remains at a high level compared to 2021 levels

As summer draws to a close and we move back towards the colder months, households will face the seasonal rise in their bills. Our research shows that a typical household will pay similar amounts in winter this year as last as the fall in prices is not sufficient to offset the loss of the Energy Bill Support Scheme. We can expect households to brace themselves for a tough winter ahead with many likely to continue having to make harmful sacrifices in their energy usage to keep their bills down. 

Which? surveyed 4,000 people across the UK to find out how different groups of consumers are coping -  financially, physically, mentally and socially - with the cost of living crisis.

You can access our complete library of data to understand the challenges facing consumers from our consumer data hub.

Many households have made cutbacks to reduce energy bills

These high energy bills have been a significant worry for households in the last year and this is reflected in the behavioural changes households made to ease financial pressure, with 85% of households taking action(s) to cut back on energy usage, the highest amongst all types of spending categories. Whilst most of the actions taken are relatively mild such as wearing extra layers in the house and reducing the use of ovens, 13 million UK households have made a more severe change like not turning the heating on despite the cold (46%).

Nearly half of UK households have not turned the heating on when it's cold

People who are left sitting in freezing temperatures in their own home face increased risk of suffering from respiratory and cardiovascular diseases such as asthma attacks, infections, heart disease, and strokes. This is especially worrisome considering that four out of 10 people are worried that their ability to recover from illness is now worse than before the cost of living crisis (37%). 

Many households have also shared the devastating impact it has had on their lives.

“It has had a negative impact in all aspects of my life. I really struggle, we are always cold at home [but] I’m too scared to put the heating on” 

Which? Cost of Living Segmentation Survey

“I have multiple disabilities, one being fibromyalgia, and I can’t afford to put any form of heating on which is causing increased pain. It’s excruciating and therefore affecting everything I do” 

Which? Cost of Living Segmentation Survey

Lower-income and aged 45-64 households are more likely to not turn the heating on

We find that some consumer groups are more likely than others to not turn the heating on when cold. 

Households with lower annual incomes are more likely to be sitting in cold homes with half of households on less than £20,000 not putting the heating on during cold weather compared to a third of households with annual incomes of more than £80,000. The marked difference between households on the highest income band of more than £80,000 and the next highest income band of £45,000 - £80,000 shows just how bad the energy crisis has been even for middle income households with only the top earners being more shielded from its effects.  

Households with lower incomes tend to keep the heating off even when cold

People who are in their mid-40s to mid-60s also tend to keep the heating off even when it is cold compared to the youngest and oldest age groups, as seen in the figure below. People who are 45-54 or 55-64 do not put the heating on 1.5 times more than people who are 18-24. They have been squeezed by the price hikes due to them likely having more financial responsibilities than the younger age groups but are not eligible to access their pension savings yet.

Mid-40s to mid-60s people are generally more likely to not turn the heating on

Conclusion

Households across the UK have been struggling to cope with dramatic increases in energy bills and the recent fall in energy prices does not automatically mean relief for consumers. It is clear from our research that many households have had to make severe cutbacks, endangering their own health just to reduce their energy bills. Impacts of the energy crisis are also not equally felt as lower-income and middle-aged groups are more likely not to turn the heating on when cold, putting themselves at further risk of life threatening illnesses.. 

As we approach the winter, the government faces the same dilemma as it did last year, of either targeting support using means-tested benefits and leaving needy non-recipients unsupported, or giving out expensive universal payments that subsidise some consumers unnecessarily, as it has failed to develop an effective mechanism for targeting financial support for those who need it. To address this, Which? is calling on the government to act urgently to introduce a targeted social tariff for energy along the lines of that proposed by Citizens Advice, that ensures essential financial support reaches all those low-income customers who need it most, without creating a cliff-edge based on benefits eligibility. In the shorter term, the government may also need to consider providing additional emergency financial support to avoid another winter of anguish for consumers. 

In addition, energy providers should also do all they can to support their customers at this difficult time, and we are calling on companies to take steps to clarify bills and other communications, to support consumers to understand what they’re being asked to pay and why, and help them to stay in control of their spending.