The Energy and Climate Intelligence Unit (ECIU) published analysis on 3 June 2025 finding that cutting funding for energy efficiency measures under the Warm Homes Plan at the Spending Review could cost households more than £1.4 billion a year in avoidable energy bills in future1. The independent think tank said that if no further ambition is unveiled, only 300,000 homes may be upgraded, against a manifesto pledge to fund 5 million home upgrades1.
The ECIU calculated that implementing the plan as pledged would save households £300 per year on average, and up to £500 annually in some cases1. By the end of this Parliament, it said, 4.7 million households may miss out on upgrades that would have saved them an average of around £300 per year, a total of £1.4 billion annually, if energy prices remain at current levels1. Over the rest of this Parliament, a household that misses out could pay nearly £1,500 extra on bills1.
Savings vary by the energy efficiency of the home. The ECIU said households in homes at Energy Performance Certificate (EPC) band F could miss out on close to £500 worth of annual energy bill savings, compared with £175 in an EPC band D home1.
| Home EPC band | Annual savings missed (ECIU estimate) |
|---|---|
| Band F | Close to £500 |
| Band D | £175 |
The analysis set out the funding history. Before the election, the Labour party committed to upgrading 19 million homes under the Warm Homes Plan, backed by a wider funding package of £28 billion; this was scaled down in the manifesto to 5 million homes funded by £13.2 billion, double the last Conservative government's pledged investment1. Ahead of the Spending Review, the ECIU said there had been speculation of further cuts, and that without investment beyond the £3.4 billion for upgrading 300,000 homes announced in November 2024, the policy may reach 98% fewer households than the 19 million originally pledged1.
"Cutting funding for energy efficiency measures under the Warm Homes Plan at the Spending Review could cost households more than £1.4 billion a year in avoidable energy bills in future"
The ECIU said government investment could be paid back in less than a decade through lower bills1. It also said the equivalent of an extra 40 LNG tankers worth of gas would be required each year for heating the 19 million homes before they are upgraded, plus further gas for their electricity supply unless more renewables are deployed1.
Why it matters for households
The analysis links the pace of home upgrades to the size of future bills. Homes that are not upgraded keep their existing demand for gas for heating, and the ECIU's figures suggest the households missing out would carry the cost of that demand at current prices1. The distributional point is that older, vulnerable and low income households tend to live in the least efficient homes, so the largest missed savings fall on band F homes1. For a household, the practical consequence described is a difference between a bill reduced by around £300 a year on average and one that is not, with the gap widening for the worst performing properties1. The ECIU frames the issue as one of gas reliance as well as bill levels, noting that the UK becomes more dependent on foreign gas as North Sea production declines1. The grants and schemes hub covers the support routes that sit alongside the plan.
What happens next
The ECIU's analysis is directed at the Spending Review, at which it says further ambition for the Warm Homes Plan could be set out1. No date for that decision, and no government response to the analysis, has been reported1.