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21% of households in fuel poverty

Two-fifths of families in Britain are either living in "fuel poverty" or in danger of tipping over the edge, research found.

Some 21% of households who took part in Legal & General's MoneyMood survey said they are spending more than 10% of their income on gas and electricity bills, meaning they are classed as being in fuel poverty.

Meanwhile, a further 19% of those surveyed said they are almost paying this proportion of their income, suggesting a small hike in costs is likely to send many more homes into fuel poverty this winter.

The findings come after a string of energy companies recently unveiled price increases amid concerns that a confusing array of tariffs is causing many families to pay hundreds of pounds a year more than is necessary.

The Government has announced proposals to require energy firms to provide just four tariffs for each fuel and to place all customers on the cheapest price available for their chosen tariff.

But critics have warned that the plans could see an end to cheap deals, reduce competition and push up bills in the long run.

Mark Gregory, Legal & General executive director, savings, said: "Any rise in the amount spent on fuel is likely to have a significant impact on how the less well-off households cope with paying bills."

Wales and London had the highest shares of households saying they are already living in fuel poverty at 31% and 29% respectively.

Households living in the South West and the East Midlands were the most likely to say they are almost living in fuel poverty, with a quarter (25%) of people saying this.

The study also found that there has been no significant improvement in the strength of household finances since this time last year, with an estimated 2.5 million homes still struggling to make ends meet.

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