By the End Fuel Poverty Coalition

Households are heading into winter with the wholesale price of gas at its highest level in four years while analysis suggests that the gas unit rate paid by consumers could hit 12p/kwh from 1st January 2027.

This would represent a doubling of the unit rate in the space of 12 months and a level not seen since the Energy Price Guarantee was in force during winter 2022/3.

Households on unregulated heating oil, LPG or coal heating are already facing spikes in the cost of their energy caused by further tension in the Middle East.

More domestic production offers no protection from this as around 90% of commercially viable North Sea gas has already been extracted, with what remains likely to be sold at global market prices, so UK households pay the same conflict-driven rate whether the gas comes from Norway, Qatar or Aberdeen.

Fresh price rises will land on households, many of which never cleared the debts built up when the Russian invasion of Ukraine sent energy prices soaring.

The End Fuel Poverty Coalition has set out a seven-point winter rescue plan for the Chancellor in a formal Budget submission.

At its centre is a call to write off energy crisis arrears, with automatic eligibility for households on means-tested benefits and no minimum thresholds or forced contributions. It would be funded from the £7 billion excess profits windfall that Citizens Advice found has been handed to energy network companies in recent years.

The submission also calls for the Warm Home Discount across Great Britain to be uprated to match rising energy prices, extended to vulnerable households outside the means-tested benefits system and funded from general taxation rather than from other people’s bills. The rebate was worth around 14% of a typical bill when it was introduced and is currently worth around 8%.

In England, Wales and Northern Ireland, a third ask would replace Cold Weather Payments with an Extreme Weather Payment, triggered by forecast cold snaps and extended to cover dangerous summer heat following the hottest summer on record.

New research by Opinium for the End Fuel Poverty Coalition found that 36% of people reported using more energy compared to previous summers to keep their home cool this summer (for example, by running fans, air conditioning or portable cooling units). This grew to over 40% in Yorkshire & Humberside, East Midlands, South East and South West England and was especially true for those living in or near cities like Bristol (47%), Nottingham (42%), Leeds (40%), London (40%) and Manchester (40%).

The remaining recommendations in the Budget submission are a referral route allowing social workers, health professionals and debt advisers to refer households directly into bill support or home upgrades, long-term funding for a social tariff framework, confirmation that the VAT reduction on electricity will not lapse on 31st March 2027 and a Guarantee attached to publicly funded home upgrades.

As households brace for the start of the heating season, the End Fuel Poverty Coalition’s energy firm profits tracker records around £125 billion in profits made on UK operations by 30 energy companies since 2020, part of more than half a trillion pounds in global profits by the same firms. Over £6 billion in UK profits has been posted since the start of the 2026 conflict with Iran alone. Analysis of this year’s Sunday Times Rich List found the wealth of UK individuals and families linked to the energy industry rose by £2.8 billion in a single year.

The submission urges the Chancellor to retain the Energy Profits Levy, ensure any successor mechanism raises revenue at a comparable level and to recover the network companies’ windfall if it is not returned to consumers voluntarily.

Jan Shortt, General Secretary of the National Pensioners Convention, said: “The continued increases in energy prices affects everyone. But older people, disabled people and those on low income face falling into debt. The Coalition asks are not overly stated and it is time that the huge profits made for suppliers is part of the deal for helping customers.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, added: “Two hundred days on from the start of the US-Israeli conflict with Iran and it is households in Britain who are being handed the bill. This is the entirely predictable result of leaving households exposed to volatile fossil fuel markets and an energy system which has generated over £6bn in UK profits for just a handful of firms and a record level of energy debt for consumers.

“The recommendations given to the Chancellor are the bare minimum of what needs to be done to make energy more affordable for those most at risk of living in unhealthy homes. With gas prices again on a dangerous upward trajectory, emergency financial support may also be needed to keep people safe this winter.

“What would make a difference now is a concerted national effort to get off gas and heating oil. That means breaking the link between electricity prices and the gas market, speeding up roll out of the Warm Homes Plan and putting support in place before this winter arrives.”

Frazer Scott, Chief Executive, Energy Action Scotland, commented: “The all too predictable impact of unaffordable energy is the devastating toll it takes on people least able to deal with it. Despite the evidence and consensus on the support needed, successive budgets have not resulted in any long-term support and a fairer system. Research gathered by the Coalition shows that support is needed and needed now. It is time to make people the priority over the profits of oil and gas giants.”

Ahead of their ‘Make Green Fair’ conference in Manchester on Saturday, Jonathan Bean, Policy Lead, Fuel Poverty Action, said: “In contrast to the Government’s promise of a £300 saving, we now face energy bills even higher from January. This means millions of us will not be able to afford even the basic energy required to stay warm and safe this winter.  The main cause is vast energy firm profits, so windfall taxes must be used to make energy affordable again.”

Robert Palmer, Deputy Director of Uplift, added: “What is driving the UK’s sky high energy bills is our reliance on fossil fuels which creates the huge price shocks we have seen with conflicts in Iran and the Ukraine. We need to get off the rollercoaster of gas and oil and urgently need to change course on energy. We need to see the Government doing more to help communities and billpayers in the transition to renewable energy.

“They must also make it clear that more North Sea drilling will do nothing to cut our energy bills. Most of what’s left is oil, the vast majority of which we export. New drilling just means more profits for oil and gas companies while making the unfolding climate crisis even worse. That is profoundly irresponsible.

“The budget should foster genuine reindustrialisation with a coherent transition plan and public investment in homegrown renewable energy, that will provide good jobs, lower bills and power the UK for decades to come.”

Legislation needed

Meanwhile, new polling shows overwhelming public backing for UK Government legislation to bring down the cost of bills, improve energy security and boost consumer protection. 

As households face another winter of rising unit rates, almost two thirds of UK adults (63%) say passing new energy legislation should be a high priority for the Government, according to new polling for the End Fuel Poverty Coalition by Opinium.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “The public have been clear that they want the Government to be focussed on cheaper energy, better homes and a regulator that acts in their interests.

“After five years of fossil fuel price shocks and record energy industry profits, households need protections that make a difference to their bills written into law. This includes action to address the fact that high bills are the result of the UK’s continued exposure to volatile international gas markets, with around 90% of North Sea oil and gas already extracted.

“The Energy Independence Bill is the opportunity to do that. Ministers should treat it as the centrepiece of their long term efforts to tackle the cost of living crisis.”