The Energy and Climate Intelligence Unit (ECIU) published analysis on 27 August 2025 showing that homes with the lowest energy efficiency ratings pay substantially more for their energy than better-rated homes, under prices set by the October 2025 price cap1. The ECIU is an independent research body.
Under the analysis, a home rated EPC Band F pays £570 more per year on dual-fuel bills than a home at the target EPC Band C rating. That figure breaks down into approximately £280 for gas, attributed to poor insulation, and £290 for electricity, attributed to inefficient lighting and appliances. Around half a million homes fall into Band F1.
The average UK home, rated EPC Band D and accounting for around 10 million homes, pays £210 more than a Band C home, with an extra £135 for gas and £75 for electricity1. The ECIU states that the extra costs for inefficient homes would have been higher still, except that energy demand has been suppressed since 2021 as households cut back in response to higher prices1.
The analysis uses prices under Ofgem's price cap for Q4 2025, applied to a full year of demand at Typical Domestic Consumption Values and for median demand at different EPC bands, using the DESNZ National Energy Efficiency Database. The ECIU notes that using Q4 prices for the year assumes prices do not vary much across the other three price caps in the coming 12 months1. It also states that estimates of the number of homes at each EPC band vary slightly between methods, but all suggest around 10 million homes at Band D, 2 to 3 million at Band E, and around 0.5 million at Band F1.
The ECIU says bills under the Ofgem price cap remain about 50 per cent above pre-energy crisis levels and are set to rise slightly in October 2025 under the newly announced cap, with the ongoing extra costs mostly a result of continued volatility in wholesale gas markets1.
"It may be warm now, but with winter approaching families living in poorly insulated homes will be facing damp, cold conditions and much higher bills again as prices remain high, approaching five years into the gas crisis triggered by Putin's invasion of Ukraine."
The ECIU states that before the election the Government committed to insulating 19 million homes through its Warm Homes Plan, and that this has since been dropped to 5 million, with funding committed in the Comprehensive Spending Review and further details expected in the Autumn1. It also cites figures stating that 12 million households are struggling with fuel poverty, and that cold, damp homes are linked to increased respiratory and cardiovascular diseases, with the Buildings Research Establishment estimating this costs the NHS £1.5bn a year1.
Why it matters for households
The gap between the best and worst rated homes is a running cost that recurs every year prices sit at this level. For a household in a Band F property, the £570 figure is the annual penalty attached to the building itself rather than to how it is used, split between gas for heating and electricity for lighting and appliances1. The energy efficiency of the UK housing stock determines how much of each bill is unavoidable, and the savings available from improving a home are measured against that gap.
The ECIU frames the issue as one of exposure to international gas markets: until heating and power shift away from gas, it argues, households remain tied to volatile prices influenced by foreign events, while electrified homes powered by UK renewables would be less exposed1. That links the condition of the housing stock directly to energy independence at the household level, since a well-insulated home needs less gas to reach the same temperature. The price cap sets the unit rates that determine what that gas and electricity cost, and the difference between prepayment and direct debit or standard credit and direct debit changes the total further.
What happens next
Further details of the Warm Homes Plan are expected in the Autumn, following funding committed in the Comprehensive Spending Review1. The ECIU states that the next renewables auction round offers a chance to build more UK wind and solar1. No date has been reported for the publication of the Warm Homes Plan details.