People living in poorer households are more likely to face higher energy costs than those who do not, a study shows. Those in low income households are more likely to pay more for their basic energy tariff and also incur higher costs per unit of energy compared with more affluent households, research suggests.

The study found people can incur higher premiums through multiple pathways—including the use of non-standard billing methods such as prepayment meters. Other factors which increased the likelihood of higher premiums include the presence of children or unemployed adults in a household and living in rented accommodation, an apartment or a flat.

On average, poor households paid between 10 to 20% more per unit than higher income households for both gas and electricity, between 2011 and 2019, the research found. Researchers say the findings shed light on the average premiums incurred by poor households, and could aid targeted policy interventions.

A team at the University of Edinburgh applied statistical methods to two large datasets, to measure how much people from poorer households pay for their gas and electricity use, and the drivers that lead to higher costs. The paper is published in the journal Energy Economics.

Researchers merged two sets of UK household data with figures from the UK Government's National Energy Efficiency Data-Framework (NEED). They combined the data with a statistical theory in a new approach to assessing the energy premiums faced by those in poorer households.

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