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Energy efficiency, affordable warmth and vulnerable households

Across the UK, the cost of living crisis has seen many vulnerable households face increasingly difficult financial situations. The crisis peaked during 2021 and 2022 alongside huge increases in fuel bills and the affordability of goods and services. Although the annual rate of inflation has been easing and the energy price cap is due to decrease from 1st April, prices are still well above pre crisis levels and continue to be a real burden and worry for households.   

Energy efficient homes are cheaper to heat and this will have a direct impact on a household’s fuel bills. On top of lower fuel bills, an energy efficient home is going to be cheaper to maintain to a decent standard, with lower upfront costs and fewer expensive repair and maintenance bills. Energy inefficient homes on the other hand will cost a lot more to keep to an acceptable level of warmth. 

The significance of this is particularly acute for households which are also vulnerable on other measures. Low-income households or households living in deprived areas are more likely to face difficult decisions about where to spend their already stretched budgets, juggling the costs of heating and maintaining their home alongside other outgoings. Maintaining affordable warmth for these households becomes increasingly difficult and unsustainable.

Fuel poverty and affordable warmth

Fuel poverty is a useful measure of this dual burden of high energy costs on low-income households. It is based on the Low Income Low Energy Efficiency (LILEE) metric which considers a household to be in fuel poverty if it is living in a property with an energy efficiency rating of band D, E, F or G and its disposable income (after housing costs and energy needs) would be below the poverty line. According to the Department for Energy Security and Net Zero’s annual report, 13% of households in England (3.17 million) were living in fuel poverty in 2023. 

This report also includes statistics based on an affordability measure of fuel poverty which measures the number of households who are required to spend more than 10% of their income (after housing costs) on domestic energy. This measure is far more sensitive to energy prices and found that the number of households exceeding this 10% threshold had more than doubled from 4.3 million in 2020 to 8.9 million in 2023 (36.4% of households in England).

Whilst these metrics are useful at a National and Regional level, they are less usable as measures of fuel poverty and affordable warmth at a local level. Firstly this is due to reliability, with the Department for Energy Security and Net Zero’s review finding that: “estimates of fuel poverty were robust at Local Authority level, but not robust at lower levels of geography. In particular, estimates of fuel poverty at Lower Super Output Area (LSOA) should be treated with caution.” Secondly this is due to timeliness, with the most recent sub-regional data being for 2021 – prior to recent rises in energy prices and the peak of the cost of living crisis.  

Measuring affordable warmth at small-area level

The term ‘affordable warmth’ is often used to refer to a household’s ability to maintain a comfortable level of warmth in their homes without experiencing financial stress. Like the measure of fuel poverty detailed above, it is a concept that encompasses both a household’s access to heating systems or fuel, as well as the affordability of heating bills relative to income. A home with affordable warmth is one where occupants can comfortably heat their living environment without sacrificing other essential needs due to excessive energy costs. 

So, how can we get a more complete measure of affordable warmth at a small-area level?

Data on energy efficiency in homes

There are many potential contributing factors to a home’s energy efficiency that can be explored alongside household energy efficiency ratings. By exploring multiple indicators, it is possible to get a more detailed picture of an area’s susceptibility to affordable warmth issues. At a practical level, these include factors such as the age, tenure, construction and size of the building. In fact recent research by the Office for National Statistics found that the age of a property is the most significant factor associated with energy efficiency. 

Given this, we have listed some indicators below that can be used to highlight areas with potentially harder to heat houses: 

Indicator What can this dataset tell us? Source
Dwellings with low energy efficiency (D-E rating and F-G rating) This dataset records the energy efficiency rating of a home and can be used to locate areas with a high proportion of low energy efficiency dwellings. The energy efficiency rating of a home is defined by an Energy Performance Certificate (EPC) and is based on data about a building’s energy features (like the building materials used, heating systems and insulation). This rating is like a report card for a home’s energy efficiency. It gives an overview of how well a home uses energy and how cost efficient it is to heat and light it. The rating is given on a scale from A to G, with A being the most efficient and G being the least efficient. Department for Levelling Up, Housing and Communities (DLUHC, 2023)
Age of dwelling stock The age of a dwelling is an important indicator of its energy efficiency. Older dwelling stock is less likely to be energy efficient and newer dwelling stock is more likely to be energy efficient. This data is recorded in the Census and can be used to explore areas with a higher proportion of older buildings. Valuation Office Agency (VOA) 2023
Tenure type Household tenure type can be a useful measure in connection with energy efficiency, in particular to locate areas with higher proportions of private rented households. Private renters are more likely to be vulnerable to low energy efficient homes, with less control over home improvements and less security in ongoing living arrangements. Census 2021 
Houses lacking central heating This indicator shows households living in accommodation that is lacking in central heating who might be particularly susceptible to low energy efficient homes. A household is described as ‘without central heating’ if it had no central heating in any of the rooms (whether used or not). Central heating includes gas, oil or solid fuel central heating, night storage heaters, warm air heating and underfloor heating. Census 2021 
Households not connected to the gas network This indicator shows the proportion of domestic properties not connected to the gas grid and therefore likely to be more susceptible to inefficient heating methods. There is no definitive source for the number of households not on the gas grid, so these estimates are calculated by subtracting the number of domestic gas meters (including non-consuming meters) from the estimated number of domestic properties. Department of Energy Security & Net Zero, 2022 


Data on financially vulnerable households

To get a full picture of affordable warmth, we also need to locate areas where households are more likely to be financially vulnerable to increased housing costs and heating bills. The following indicators can be used as measures of household financial vulnerability and deprivation: 

Indicator What can this dataset tell us? Source
Working age Benefit claimants (Benefit combinations) This indicator can be used as a measure of low-income households. It shows the proportion of people of working age receiving DWP benefits. Working age DWP Benefits are benefits payable to all people of working age (16-64) who need additional financial support due to low income, worklessness, poor health, caring responsibilities, bereavement or disability. DWP August 2023 
Older people in receipt of pension credits  This indicator can be used as a measure of pensioners living in poverty. Pensioners in poverty are defined as pensioners in receipt of Pension Credit. Pension Credit provides financial help for people aged 60 or over whose income is below a certain level set by the law. DWP August 2023 
Children aged 0-19 in relative low-income families This indicator can be used as a measure of vulnerable children living in poverty. It shows the proportion of children aged 0-19 living in relative low-income families. Relative low income is defined as a family in low income Before Housing Costs (BHC) in the reference year.  Department for Work and Pensions (DWP) 2021 
Index of Multiple Deprivation (IMD) 2019 Rank This measure can be used to locate vulnerable areas that show particularly high levels of deprivation across indicators related to income and housing. The Indices of Deprivation 2019 are a relative measure of deprivation for small areas (Lower-layer Super Output Areas) across England. The overall Index of Multiple Deprivation 2019 combines together indicators under seven different domains of deprivation: Income Deprivation; Employment Deprivation; Education Skills and Training Deprivation; Health Deprivation and Disability; Crime; Barriers to Housing and Services and Living Environment Deprivation. Data shows Average LSOA Rank, a lower rank indicates that an area is experiencing high levels of deprivation. Ministry of Housing Communities and Local Government (MHCLG) 2019


Which areas are particularly susceptible to challenges around affordable warmth?

Using different combinations of the above indicators, we can begin to get a better picture of where households may be particularly susceptible to the challenges of affordable warmth.

The maps below show the proportion of dwellings with a low energy efficiency rating (F-G) and the Index of Multiple Deprivation (IMD) 2019 score (where higher = more deprived). The areas are shaded based on the highest 20% of households across England on these measures. The 5 colour bands are based on the top 1% (dark red), 1-5%, 5-10%, 10-15% and 15-20% (green).

The maps show that there is some overlap between higher concentrations of low energy efficiency homes and multiple deprivation – particularly across the outskirts of industrial northern towns, rural hotspots and coastal areas.

Dwellings with low energy efficiency (F-G rating) Index of Multiple Deprivation 2019 (IMD) Score (higher score = more deprived)
Image of the UK showing hotspots of dwellings with low energy efficiency (F-G rating) Image of the UK showing Index of Multiple Deprivation 2019 (IMD) Score (higher score = more deprived) hotspots


We can also use these datasets to dig deeper into the details at lower levels of geography. Below we will explore which LSOAs might be particularly vulnerable to the dual disadvantage of low energy efficiency and financial vulnerability. 

LSOAs with low energy efficiency and high financial vulnerability

The table below is ranked in order of the LSOAs in England with the highest proportion of households with energy efficiency ratings of D-E (the government’s 2030 fuel poverty target is to have all low income households living in a property with a fuel poverty energy efficiency rating of band C or better). LSOAs have been included in this table where they also have higher rates of vulnerability than the England average on all four of the following measures:

  • Low-income households (Working age benefit claimants) – DWP August 2023
  • Children aged 0-19 in relative low-income families – DWP 2021
  • Pensioners in poverty (claiming pension credit) – DWP August 2023
  • Index of Multiple Deprivation (IMD) 2019 Rank (where 1 = more deprived) – MHCLG 2019

Of the 15 LSOAs in England with the highest proportion of households with an EPC rating of D-E, 10 areas were also flagged as showing above average rates of households in financial hardship on all four measures above. These are listed in the table below and are concentrated around Birmingham, Leicester and Bradford. Cells are written in red where rates are well above the England average and orange where they are slightly above the England average. 

LSOA Name Local Authority EPC Rating D-E Low-income households Children in poverty Pensioners in poverty IMD 2019 Rank
North Sherwood – Nottingham 007D Nottingham 94.2% 32.3% 30.4% 18.4% 4,935
St Matthews & Highfields North – Leicester 018B Leicester 94.00% 29.20% 61.40% 40.40% 8,988
Perry Barr & South Hamstead – Birmingham 024D Birmingham 93.80% 28.00% 41.80% 15.40% 11,010
Bordesley – Birmingham 139B Birmingham 93.00% 43.50% 62.80% 39.10% 2,792
Bradford 044G Bradford 92.90% 30.20% 48.30% 43.90% 7,079
Little Bromwich – Birmingham 063F Birmingham 92.80% 44.60% 63.20% 54.80% 3,435
Shearbridge & University – Bradford 044D Bradford 92.60% 33.10% 63.10% 42.10% 3,336
Handsworth South – Birmingham 039D Birmingham 92.40% 45.10% 51.60% 40.40% 2,540
Normanton North & Peartree – Derby 020D Derby 92.30% 36.60% 64.90% 23.00% 4,577
Normanton North & Peartree – Derby 020D Derby 91.80% 43.50% 69.50% 31.50% 3,094
England 51.5% 22.8% 19.3% 11.3% 16,356

How to explore this data for your local areas using Local Insight

Local Insight brings together all the datasets mentioned here (and many more!) all under one roof. All data can be easily explored through interactive maps, dashboard and reports, see an example summary report for Liverpool here). 

With Local Insight, you can explore data for any area type – which means that you can analyse data for your wards, parishes, or neighbourhoods in which you have housing stock. 

These datasets are all available to explore on Local Insight and can be viewed on maps, dashboards and in reports for your local areas.

On top of this you can overlay your own data to generate extra insight. For example, you could plot the location of your housing stock and compare this with the datasets on low EPC ratings.

Map image demonstrating how housing stock can be placed with choropleth information on Dwellings with low energy efficiency (F-G rating)

Local Insight is available for England, Wales and Scotland. To explore the platform yourself, book a demo today.

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