Resolution Foundation

Working from home means bigger bills and highlights the need for better insulation

‘Running the boiler all day will see the average household use around 50 per cent more gas than if their home was unoccupied’
Net Zero

With the rise of the Covid variant Omicron, working from home is back. One of the many differences between this winter and last, however, is that working from home has come amid a cost of living crisis, with inflation recently hitting a 10-year high.

It’s easy to see the spread of higher prices in day-to-day life, and we’ll literally feel it when we fire up the central heating to stay warm during working hours, in addition to just in the evening.

High gas prices are a key driver of costs rising across the economy; soaring commodity markets mean that the cost of each unit of gas that fuels our boilers now costs around a third more than it did this time last year.

This jump is stark but would be bigger still were the price cap not protecting households from the vagaries of global energy markets.

As well as the cost of gas rocketing, working from home means that we will be using much more of it. Running the boiler all day will see the average household use around 50 per cent more gas than if their home was unoccupied during working hours, pushing up both our carbon footprints and energy bills.

Higher bills will obviously have a greater effect on poorer families, with the lowest income households spending twice as much of their budgets on gas than the richest, a discrepancy made ever starker by the Government’s decision to remove the £20 universal credit uplift.

As such, instead of being a time to rejoice in minimal commuting and lunches at home, the return of working from home will have a clear and immediate effect on many families who are already struggling.

Bigger bills mean, unfortunately, that many families will be facing up to April’s expected jump in the price cap in debt to their energy company.

Households on the lowest incomes are three times more likely to have run down their savings during the pandemic than those at the top of the income spectrum, so they could already be in poor financial health as they face a record-breaking increase in energy bills.

There are, however, solutions to the blight of high energy bills that will also see us move towards reaching our net-zero emissions target. Each winter brings a brutal reminder of the need to get on with insulating homes.

Nationwide efficiency standards have barely increased year on year, evidenced yet again in the annual lack of progress in cutting emissions from residential buildings – something that will have to change in the near future.

All against a backdrop of repeated failed government initiatives – from the Green Deal to the Green Homes Grant – that have not delivered on goals to improve the energy efficiency of our housing stock.

As well as being susceptible to gas prices, the nation’s leaky homes mean we are at the mercy of another factor outside of our control: the weather. A cold winter (last year was thankfully fairly average) or a repeat of 2018’s Beast from the East risks amplifying problems further still.

The problem is most acute in private rented accommodation. These least insulated properties are most likely to have the oldest and most gas-hungry boilers.

At the same time, renters generally spend the highest share – more than a third – of their income on rent. Higher energy costs will add to already squeezed budgets.

The Government’s recent plan to decarbonise our homes was again shy on insulation funding – instead focusing on bringing down the cost of heat pumps – leaving around 60 per cent of homeowners with no support for improving their homes.

This position is not sustainable as we move into the “delivery phase” of net zero.

Emissions from our homes need to halve by 2035. Tackling both our carbon footprint and sky-high energy bills means that excuses for not wrapping up our homes are wearing thin. Maybe the experience of this winter will finally give us the push to properly insulate our homes.

This article was first published in The i