Which? published research on 4 April 2023 estimating that the poorest 10 per cent of UK households will spend an average of £209 more on energy this financial year than last, and used the findings to call for an energy social tariff. The consumer body said the shortfall arises as support falls away, including the end of the Energy Bill Support Scheme, which it says "provided an additional £400 to all households in the UK from October 2022 - March 2023"1.
The research defines the lowest income decile by income and family size. A single person household in this group would earn less than £9,800 a year, while a couple with two children would earn less than £20,500 after taxes and benefits1. Which? estimates these households use less energy than average, at around 8,906 kWh of gas and 2,289 kWh of electricity a year, against median usage of 12,185 kWh of gas and 2,966 kWh of electricity1. Because they use less, Which? says they benefit less from falling prices but still lose the £400 of additional support, leaving them £75 a year worse off than a household with average energy consumption, which the research says will spend £135 more1.
Which? based its 2023-24 figures on published unit rates and standing charges for the Energy Price Guarantee from April to June 2023, and on Cornwall Insight price cap forecasts published on 15 March 2023 for later periods. It assumed no prediction was available for January to March 2024 and held prices at the level forecast for October to December 2023. Cornwall Insight released new predictions on 31 March 2023 which Which? says were not published in time to be incorporated1.
The government's decision to keep the Energy Price Guarantee at £2,500 for an average household until July is noted in the research, alongside a prediction that energy prices will drop to around £2,000 for the average household from July1. The Budget 2023 confirmed that prepayment meter prices would be the same as direct debit prices from April 2023 onwards1. Which? says higher costs could be especially difficult for prepayment meter users, who cannot spread costs across the year1.
Why it matters for households
The estimate concerns the gap between what the lowest-income homes spent on energy last financial year and what they are expected to spend this one, after the £400 Energy Bill Support Scheme payments of £66 or £67 a month ended1. For a household already spending a large share of its income on gas and electricity, a £209 average shortfall is money that has to come from elsewhere in the budget, and it lands hardest on homes that cannot shift usage to cheaper months. Prepayment meter users pay as they go, so winter consumption is paid for in winter1.
The proposal Which? backs is a discounted rate for those most in need, designed around household income and energy usage rather than benefit eligibility alone, so that households just above the benefits threshold are not excluded1. The distinction between a social tariff and existing schemes such as the Warm Home Discount is set out in our guide to the energy social tariff versus the Warm Home Discount, and the current state of the proposals is tracked in A Social Tariff for Energy: The Proposals and Where They Stand. For homes in England, the routes currently open are covered in Help for Low-Income Households in England, with equivalent guidance for Northern Ireland.
What happens next
The 2022 Autumn Statement committed to having a new approach to consumer protection, such as a social tariff, in place by April 20241. Which? says the government needs to act on this urgently, and that ministers currently have no effective means of targeting financial support to the lowest incomes in time for the coming winter1. Cost of living payments to those on qualifying benefits are to continue, which Which? says will leave low-income households who do not qualify for benefits without support1. No further timetable for a social tariff has been reported.