Rising pressure on bills
The latest energy price cap rise from October leaves prices around 50% higher than before the energy crisis. Fuel-poor households, defined as those spending over 10% of income after housing costs on energy, now number 9 million in England. These homes needed an extra £407 a year in 2024 to escape fuel poverty, up 62% since 2020.
How a social tariff would work
Research commissioned by OVO from Green Alliance models several options. A tariff aligned with the value of the Warm Home Discount and Winter Fuel Payment could reduce fuel poverty by 12%, lifting over one million households. A broader tiered structure reaches 19% reduction, or 26% if paired with better energy-efficiency standards in rented homes. The most targeted “deep and narrow” version, focused on the lowest income deciles, could cut fuel poverty by 42%, rising to 50% with efficiency upgrades by 2030.
Current support like the Warm Home Discount mainly reaches benefit recipients and does not cover year-round costs or reflect volatile gas prices. OVO wants government and industry to use existing data to identify households with unavoidable high demand, such as those with disabilities or older residents.
What OVO wants next
David Buttress, CEO of OVO said: “Families cannot keep living on a knife edge, worrying how they will afford their bills each winter. With gas prices still volatile, this crisis will not fix itself. The government has the power to change things, but only if it acts now to deliver a progressive and targeted social tariff.”
Shaun Spiers, Executive Director of Green Alliance added that a social tariff could better protect low-income households from price swings. You can compare current energy deals on our gas and electricity pages to see what support is available now.
