5th Report - Tackling the energy cost crisis

Key findings

• Domestic energy debt reached £4.15bn in Q1 2025, the highest on record, with average debt per customer doubling to £1,712 since 2021; the Warm Home Discount rebate has risen only £10 since 2011 while household bills rose over £500.
• The Warm Home Discount is 'no longer adequate' at £150; a tiered approach targeting income and energy usage could reduce England's fuel poverty gap by £300m annually at no additional cost.
• Effective data sharing between energy suppliers, HMRC, government departments, local authorities, and the NHS is essential but currently lacking; political will and cultural resistance, not legislative barriers, are the main obstacles.
• A social tariff must be mandatory, auto-enrolled, income-targeted, and nationwide; three-quarters of UK public support it; earliest viable introduction is winter 2026–27 pending data infrastructure improvements.
• Cold Weather Payment criteria are set too high (zero degrees for seven consecutive days); proposals include £10 daily payments on days Met Office forecasts zero degrees or below, paid in advance rather than after cold weather ends.
• The Energy Ombudsman lacks enforcement powers, leaving consumers without redress even when rulings favour them; smart meter issues and wrongful back-billing persist despite improving accuracy.
• High energy costs pose an existential threat to UK manufacturers and smaller businesses; existing government support schemes are inadequate and suppliers exploit a complex market.

Recommendations

• Establish an Energy Data Sharing Taskforce involving energy suppliers, government departments, HMRC, local authorities, the NHS, and third parties to improve support scheme delivery, enable social tariff introduction, and tackle fuel poverty—mechanisms to be in place before winter 2026–27.
• Broaden Warm Home Discount eligibility criteria to include all fuel poor households and those with disabilities or long-term health conditions (currently excluding one-third of fuel poor households).
• From winter 2026–27, retarget the Warm Home Discount using a tiered approach allocating funding based on household need and energy usage; link rebate value to wholesale prices.
• Launch a consultation on an energy social tariff by January 2026 and commit to introducing it ahead of winter 2026–27; ensure it is mandatory for all suppliers, auto-enrolled, income-targeted, nationwide, and provides significant discounts on unit rates and standing charges.
• Explore reform of the Cold Weather Payment, considering whether eligible households could receive £10 for each day the Met Office forecasts zero degrees or below, paid in advance; subject to cost-benefit analysis and implement as soon as viable.
• Expand Energy Ombudsman powers to enforce its own rulings so consumers achieve redress when billing disputes occur.
• Fund expanded winter support schemes from across the wider energy system rather than via increased levies on consumer bills.

Key actors

Bill Esterson (Chair, Energy Security and Net Zero Committee), Ed Miliband (Secretary of State for Energy Security and Net Zero), Ofgem (energy regulator), Citizens Advice, National Energy Action, Fair by Design, Energy Ombudsman, Make UK