RWTH: 600,000 households in Germany fall below the risk of poverty threshold

Energy prices have risen sharply in recent months. Most recently, the war in Ukraine caused further tension in the already very high energy prices. The sharp rise in energy prices is also having a negative impact on private households. In a short study by the Chair of Energy System Economics at the RWTH Aachen, these effects were examined in energy-economic simulation models.

According to the study results, there is a clear additional financial burden across all household groups. An average four-person household that draws heat from a gas heater currently has to calculate additional expenditure of 1,624 euros over a year compared to the beginning of 2020, i.e. before the effects of the corona pandemic. Of this, electricity accounted for 10.6 percent at EUR 172, natural gas for EUR 753 for 46.4 percent and petrol and diesel for an average of EUR 699 for 43.0 percent

The study examines the consequences for households with different income situations. The annual additional expenditure for the lowest-income households in the lowest decile, i.e. tenths, compared to the beginning of 2020 is 492 euros. The additional expenditure of the highest-income households is 1,419 euros in the top decile. Although there is a factor of 2.9 between the two household groups when it comes to the additional expenditure on energy, there is a factor of 8.2 when comparing the disposable income of both household groups.

Low-income households hit hardest

Households with the lowest incomes are therefore hit hardest by the rise in energy prices in terms of income. According to the results of the study, the significant rise in energy prices since the beginning of 2020 alone has caused around 600,000 households in Germany to fall below the risk of poverty threshold. In the bottom decile, natural gas dominates with 42 percent of the total additional energy expenditure. This proportion is 31 percent for the highest-income households in the top decile. Conversely, in the household decile with the highest income, additional spending on petrol and diesel predominates with a share of 43 percent. That figure is 24 percent in the lowest-income decile.

The study also comes to the conclusion that households are reducing their energy consumption considerably in view of the high prices. As a result of the higher energy prices, the average four-person household reduces its annual electricity consumption by 4.9 percent (202 kWh), natural gas consumption by 25.0 percent (3,436 kWh) and uses 14.0 percent (205 liters) less fuel (petrol). and diesel).

According to the chair’s study results, it is more likely that high-income households will benefit from the relief for consumers of petrol and diesel recently presented by the federal government. Low-income households would be more likely to benefit from gas relief. Furthermore, the authors of the study advise against relieving the burden of a direct reduction in energy prices. The high prices would also contribute to reducing the consumption of fossil fuels and the import dependency on them.

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