National Energy Action (NEA) and Energy Action Scotland published the UK Fuel Poverty Monitor 2021-22 on 17 January 2023, covering the period 2021 to 20221. The report recommends that the Government urgently consults on a mandatory social tariff to begin in April 2024, or sooner if practicable, with targeting that goes beyond households receiving means-tested benefits1. On the same day, 95 charities and non-profit organisations sent an open letter to the Chancellor, Jeremy Hunt MP, calling for a social tariff for the energy market1.
A social tariff is defined in the report as a targeted discount energy deal for qualifying low-income consumers, typically below the price of the cheapest available energy tariff and aimed at those living in fuel poverty or on a low income1. NEA estimates that the energy crisis has pushed over 6.7 million UK households into fuel poverty, up from 4.5 million in October 2021, and that the number of fuel poor households across the UK is expected to rise to 8.4 million from April 2023, when the Energy Bills Support Scheme ends and support under the Energy Price Guarantee is reduced1. The report is informed by a Call for Evidence that received responses from 119 respondents covering the breadth of the UK1.
Polling for the report found that 81 per cent of respondents said they would ration energy this winter, 55 per cent were already rationing hot water, and 13 per cent were reducing use of medical equipment2. Separate polling by Opinium for Age UK, conducted between 2 and 9 January 2023 with a sample of 1,010 adults aged 60 and over in Great Britain, found 71 per cent agreeing that a social energy tariff should be available for those who need it most, rising to 76 per cent of those with a disability, and that 24 per cent of over-60s were living in homes colder than they would like, rising to 27 per cent for older people with a disability1.
The report found that households on the lowest incomes, in the least efficient homes and on prepayment meters are being hardest hit by energy price increases, and that households using prepayment meters have faced the biggest challenges accessing support and are at acute risk due to self-disconnection1.
"From April 2023, the Government's Energy Bills Support Scheme comes to an end and the support provided by the Energy Price Guarantee will be reduced."
Why it matters for households
The report's central claim is that the current structure of support leaves some of the poorest households paying more for the same energy, and that the households hardest hit are not always those that existing identification measures, such as means-tested benefit receipt, capture1. For a household, the practical question raised by a social tariff is whether a discounted rate would apply automatically or require an application, and how eligibility would be assessed. The report recommends that targeting go beyond means-tested benefits to include those on disability benefits and Carer's Allowance, as well as households missing out on welfare support but still struggling with bills1. None of the sources state how a scheme would be administered, who would pay for it, or what discount level would apply.
The report also links cold homes to health outcomes, noting that households with both a low income and a medical condition or powered medical equipment at home are most at risk of the worst impacts of living in a cold home3. For a household, this connects the tariff question to the wider condition of the property: the report found that households in the least efficient homes are being hardest hit, which is the point at which energy bills and energy independence meet the fabric of the building. The report captures recommendations around five themes, including better identifying households that require financial support and accelerating a fair and affordable transition to net zero2.
What happens next
The report recommends that the Government urgently consults on a mandatory social tariff to begin in April 2024, or sooner if practicable1. No consultation has been announced in the sources. The Energy Bills Support Scheme ends and Energy Price Guarantee support is reduced from April 20231. The full Fuel Poverty Monitor was published on 19 January 2023, following release of the executive summary on 17 January 20233.