Fuel Poverty in Scotland: Definition, Rate and the 2040 Target

Scotland measures fuel poverty by a statutory test set out in section 3 of the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019. A household is in fuel poverty if, to maintain a satisfactory heating regime, the total fuel costs necessary for the home are more than 10% of the household's adjusted net income after housing costs, and if, after deducting fuel costs, benefits received for a care need or disability and childcare costs, the remaining adjusted net income is insufficient to maintain an acceptable standard of living. Extreme fuel poverty follows the same definition except that the fuel cost threshold is more than 20% of adjusted net income after housing costs¹.

On the most recent survey measurement, 732,000 households in Scotland were in fuel poverty in 2024, a decrease of 127,000, or five percentage points, on the previous year². Separate scenario modelling, which projects the statutory definition forward using Ofgem price caps rather than surveying homes, estimated around 820,000 fuel poor households in Scotland for October to December 2026, 32% of all households and an increase of around 20,000 households on the July to September 2026 estimate³. The survey and the modelling answer slightly different questions, and the numbers should not be read as a single time series.

The statutory targets sit far below all of these figures. The 2019 Act requires that by 2040, as far as reasonably possible, no household in Scotland is in fuel poverty, with binding limits of no more than 5% of households in fuel poverty and no more than 1% in extreme fuel poverty⁴.

The two-part test that defines a fuel poor household

The Scottish definition is deliberately a two-stage test, and both stages must be failed before a household counts. The first stage is the fuel cost ratio: more than 10% of adjusted net income after housing costs, calculated on the fuel needed to maintain a satisfactory heating regime rather than on what the household actually spends. That distinction matters, because households who ration heat do not fall out of the statistics by doing so. The second stage is the residual income test. After deducting fuel costs, childcare costs and benefits received for a care need or disability, the remaining adjusted net income must be enough to maintain an acceptable standard of living, benchmarked at 90% of the UK Minimum Income Standard produced by Loughborough University⁶.

Extreme fuel poverty applies the same structure with the ratio raised to more than 20%¹. An additional amount is added to the required fuel spend for households in remote rural, remote small town and island areas, recognising that the same warmth costs more to deliver in those places⁷.

This is a tighter and more explicitly income-based test than the one Scotland used before. The older definition, shared at the time with Wales and Northern Ireland, simply asked whether a household would need to spend more than 10% of its income to keep the home at a reasonable temperature, with no residual income condition⁸. Under that earlier measure, 27.1% of households in Scotland were recorded as fuel poor in 2012⁹, and an estimated 748,000 households, 30.7% of all households, in 2015¹⁰.

The figures: survey measurement and price cap modelling

Two official series describe fuel poverty in Scotland, and they move differently.

The modelled quarterly figures swing with the price cap, which is the point of them: they show the statutory definition responding to fuel prices before any survey can pick the change up. For January to March 2026, around 400,000 households were modelled as being in extreme fuel poverty, 16% of all households and 50% of all fuel poor households¹³. The same modelling tested the effect of removing the Renewables Obligation and Energy Company Obligation levies from bills, giving around 730,000 fuel poor households (29%) and 350,000 in extreme fuel poverty (14%), a reduction of around 60,000 fuel poor households (2.5 percentage points) and 50,000 extremely fuel poor households (1.9 percentage points)¹³.

Local variation is wide. Local authority tables covering 2022 to 2024 show rates ranging from 22% in Stirling to 51% in the Orkney Islands, against a Scotland average of 31%⁷. Engagement on the periodic report put the practical spread as fuel poverty rates "likely to range for something in the region of 1 in 2 to 1 in 5 households" depending on geography and demographics, against a benchmark of 24% of households in 2019¹⁵.

What drives the rate

The Scottish Government identifies four key drivers: levels of household income, the price of fuel required for space and water heating, the energy efficiency of the dwelling, and the required use of fuel by households to maintain satisfactory heating regimes¹⁶. The fuel poverty strategy states the same four as poor energy efficiency of the home, low household income, high energy prices, and how energy is used in the home¹⁷. Two of the four are explicitly finance-related, energy prices and income¹⁸.

Price is the driver that moves the headline number fastest. Because the definition used in Scotland is sensitive to changes in fuel prices, the estimated rate rose substantially between 2019 and 2023, reaching 34% in Scotland¹⁹. Income sets who is exposed: in 2018 the fuel poverty rate was 95% for households in the bottom income band, below £200 per week¹⁸.

Heating fuel is the clearest structural divide. In 2024, an estimated 42% of households using electricity for heating were in fuel poverty, against 27% of those using gas for heating and 26% of those using other fuels; 13% of oil-using households were in extreme fuel poverty²⁰. The depth of the problem follows the same line: fuel poor households using electricity as their primary heating fuel had a modelled median fuel poverty gap of around £2,000 a year for January to March 2026¹³. The median gap for fuel poor households generally was measured at £690 in 2021, though a second figure of £620 is also reported for that period, and the two do not agree¹².

Purchasing patterns compound the difficulty for off-grid households. Users of solid fuel generally purchased directly from local suppliers and often stockpiled over the summer to ensure they had enough to last through colder winter months¹⁸, which requires capital in hand months before the cold arrives. Around 170,000 children were living in fuel poverty on the 2017 to 2019 average²¹.

Tenure, place and household type

Fuel poverty is not evenly distributed, and the sectoral gap has widened rather than closed.

Geography cuts across tenure. Fuel poverty levels are higher in remote rural areas (43%) and remote small towns (34%) than in urban areas (24%), against a Scottish average extreme fuel poverty rate of 12% over 2018 to 2019²³. In 2022 the rate for rural households was 35% against 30% for urban households, and the rate for remote rural households, 47%, was higher than for all other areas¹¹. Deprivation adds a further layer: 42% of households in the 15% most deprived areas were fuel poor in 2022, compared with 29% elsewhere¹¹, and in 2021 the corresponding split was 30% against 18%¹².

Age and ownership status matter too. Families had a lower rate of fuel poverty, 27%, than older households at 36%, and among owner occupiers 14% of those with a mortgage and 28% of those who own outright were assessed as fuel poor in 2022¹¹. Outright ownership removes a housing cost but not a heating bill, which is why owning a home outright is no protection where the fabric is poor.

The rural and urban difference is set out in more detail on rural and urban fuel poverty in Scotland, and the heating fuel split on fuel poverty by heating fuel type.

How Scotland's measure differs from the rest of the UK

Fuel poverty is a devolved matter, and each nation measures it differently, so headline rates are not directly comparable. The Scottish definition has long been described as slightly different from that used in England and Wales, with Scotland using a higher temperature standard²⁴. Scotland's current statutory definition also carries the residual income test against 90% of the UK Minimum Income Standard and the rural uplift, neither of which has a direct counterpart in the older ten per cent measure⁶.

Historically the measures produced broadly similar results where the definitions were similar: in 2018, Ofgem reported 23% of Welsh households (291,000) and 26.5% of Scottish households (649,000) in fuel poverty under a definition that, for Scotland and Wales, turned on spending more than 10% of income on fuel²⁵. Scotland's rate on its own earlier basis was 23.7%, around 583,000 households, in 2017²⁶.

Because the definitions diverge, a household moving across a border does not change its circumstances but may change its classification. Comparisons of the schemes and their logic are set out on why home energy grants differ across the four nations, and the equivalent national measures on fuel poverty in Wales and fuel poverty in Northern Ireland. Which powers sit where is covered on devolved and reserved energy powers.

The statutory targets and who reports against them

The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 requires that by 2040, as far as reasonably possible, no household in Scotland is in fuel poverty, and sets four numerical targets: no more than 5% of households in fuel poverty, no more than 1% in extreme fuel poverty, and a median fuel poverty gap of no more than £250 adjusted for 2015 prices⁴. The gap target is expressed as no more than £250 in 2015 prices before adding inflation⁵. The 5% target is restated consistently across the Heat in Buildings Strategy, the fuel poverty strategy and subsequent regulatory impact assessments⁴.

Progress is reported through the Scottish House Condition Survey, through periodic reports on tackling fuel poverty, and through scrutiny by the statutory Scottish Fuel Poverty Advisory Panel, which has described the Fuel Insecurity Fund as providing vital support for fuel poor people, who are amongst the most vulnerable living in Scotland²⁹. Scotland's wider emissions commitments, which shape the heat decarbonisation programmes that carry much of the fuel poverty effort, are set out on Scotland's climate targets.

Delivery: the programmes that sit behind the target

Warmer Homes Scotland helps households in, or at risk of, fuel poverty improve their heating and energy efficiency³⁰. The national scheme was launched in September 2015³¹ and relaunched in 2023 with increased funding for clean heating systems³⁰. It is available to households, both owner occupiers and some private rented sector tenants, who are living in or at risk of fuel poverty and who meet the qualifying eligibility criteria³¹.

• Where technically suitable, households are offered clean heating systems first; if this would increase energy bills, an emission-producing system may be provided instead³⁰.
• Clean heating is offered in the first instance only where installation will avoid pushing households into fuel poverty or worsening their depth of fuel poverty³⁰.
• Most homes also get energy-saving upgrades, no matter which heating system is installed³⁰.
• Renewable and micro-generation measures available have included ground source heat pumps, micro-wind, micro-hydro and micro-CHP systems³¹.
• All home improvements funded by the scheme must be delivered by Warmworks-approved installers, and in most cases the Scottish Government meets all the costs, though in some rare cases a household may need to pay some costs³².
• Private rented properties covered by the statutory Repairing Standard no longer receive improvements a landlord is legally obliged to provide, but remain eligible for other improvements if recommended³².

The scheme is described as offering support worth £10,000 or more for eligible households³². It has helped more than 46,000 households throughout Scotland, with around 21,000 households referred through to the fuel poverty support programme since the new scheme launched in October 2023³³.

Access runs through Home Energy Scotland, a network of local advice centres covering all of Scotland, funded by the Scottish Government and managed by Energy Saving Trust³⁴. Advisors can check eligibility for financial support including Warmer Homes Scotland and the Home Energy Scotland Grant and Loan³⁵, and the service can be contacted free by phone, email or WhatsApp on 0808 808 2282³⁵. Delivery is not instant: an industry roundtable recorded anecdotal reports of delays of up to 30 days for an initial call back, and suggested that two to three months can elapse before installation is even scheduled, with funding paid to the customer rather than directly to the contractor³⁷. Area-based delivery is covered on HEEPS area based schemes.

What fuel poverty means for household energy independence

Fuel poverty is, at root, a measure of dependence. A household fails the test because the heat its home requires costs more than its income can absorb, and every one of the four drivers is something the household mostly does not control: the price of fuel, set in wholesale markets and mediated by the price cap; the level of income; the efficiency of the building fabric; and the heat the dwelling demands¹⁶. The quarterly swings in the modelled rate, from 31% for January to March 2026 to 27% for April to June 2026 and 32% for October to December 2026, are driven by price cap movements rather than by anything happening inside Scottish homes¹³.

Only one of the four drivers can be permanently changed by work on the property. Insulation and heating upgrades lower the fuel a home needs at any price, which is why the programmes attached to the 2040 target are fabric and heating programmes rather than bill support. But the same modelling shows the limit: electrically heated fuel poor households carry a modelled median gap of around £2,000 a year¹³, and 42% of electrically heated households were fuel poor in 2024 against 27% of those on mains gas²⁰. Switching a poorly insulated home from a cheaper fuel to a more expensive one can deepen fuel poverty, which is why Warmer Homes Scotland will fit an emission-producing system instead where clean heating would increase bills³⁰.

Dependence also remains on the delivery chain itself. Grant eligibility, installer availability and scheme design sit with government and its contractors, and the schemes in place have been described as requiring review to ensure they are designed for the next five to ten years³⁷. A household that reduces its heat demand reduces its exposure to all of this. A household that cannot fund the work stays exposed to whatever the next price cap does. Household-level generation and storage, which shift part of the supply side into the home, are covered on microgeneration uptake by nation, and the wider constitutional picture on devolution and household energy independence.