The energy crisis, driven by fossil fuel price shocks, has pushed nine million households in England into fuel poverty – spending over ten per cent of their income on energy bills. Current government support schemes aren’t helping. The Warm Home Discount provides only £150 annually, which falls far short of the £407 average fuel poverty gap, and only lifted one per cent of households out of fuel poverty in 2024.
In this report, we explore how a social tariff offering percentage discounts on gas and electricity bills could provide far more effective support than existing flat-rate schemes. Through modelling of three tariff designs, we demonstrate how targeted support could lift between 12 per cent and 50 per cent of fuel poor households out of the poverty threshold, reaching working families and those with high energy needs currently excluded from government support.
