As an environmental charity, we are keen to see the UK achieve its ambition of Net Zero carbon emissions, as quickly as possible. A shift to decarbonised heat has a key role to play in this, as so many British homes burn irreplaceable fossil fuels for warmth. But as a charity with an aim to reduce fuel poverty, we work to ensure there is a “just transition” towards Net Zero, so vulnerable, low-income households aren’t left behind while “able to pay” households reap the benefits of emerging low carbon technologies.
The revised Fuel Poverty Strategy has been unveiled, shaping the support available for the most vulnerable households, for years to come.
We’ll share below the Executive Summary, and a link to the full paper. First we’ll share our initial insights:
- It’s reassuring to read that the new government is retaining the target to remove as many fuel poor homes as is reasonably practicable, from fuel poverty by 2030. This deadline felt like a long way away when it was first suggested, in 2014. Now it’s so close it will take a lot of action to achieve, and we welcome an escalation of support to help households over the remaining 4 years.
- It’s perhaps a little disappointing to read that the new government is retaining the “Low Income Low Energy Efficiency” (LILEE) definition of fuel poverty. This defines fuel poverty as a household with an energy efficiency rating of D-G, whose net income would be below the official poverty line, were they to heat their home to a decent standard. The problem with this definition is that it excludes people who can’t afford any heat, if they live in a property that’s rated A-C. To us, there is little difference between a cold family who can’t afford to switch on their gas central heating system in a property with an EPC rating of D, and a cold family who can’t afford to switch on their heat pump in a property with an EPC rating of B.
Executive Summary
Reducing energy costs: the Budget 2025 acted to reduce energy costs by an average of £150. This includes moving 75% of the domestic costs of the Renewables Obligation to the exchequer from April 2026/27 to 2028/29. This shifts the balance from levies to public spending by £7 billion over 3 years. In addition, we have expanded the Warm Home Discount to provide a £150 rebate to a further 2.7 million of the poorest households with nearly 6 million households now eligible for the discount. This government is ensuring that lower income households benefit the most from energy bill reductions.
Tackling the cost of living: Our focus on cost of living to benefit fuel poor consumers goes beyond energy costs. We are boosting incomes through changes to the National Living Wage and National Minimum Wage and government has legislated for an above-inflation rise in Universal Credit. Fuel poverty is intrinsically linked to child poverty. High energy costs can be the difference between a household being in poverty or not, and can force decisions on which essentials are bought. As set out in the Child Poverty Strategy the government has removed the 2-child limit which will lift 450,000 children out of relative poverty within this Parliament, and benefit over one and a half million children more generally.
Improved energy performance: By focusing on the energy efficiency of homes, we are seeking to deliver long lasting change. Our plans to introduce minimum energy performance standards in the rental sectors will see around 650,000 households lifted out of fuel poverty. This will be complemented by the £5 billion allocated to low income households in the ‘Warm Homes Plan’. This will be initially delivered through existing schemes; the Warm Homes: Social Housing Fund and Warm Homes: Local Grant. Government intends to establish a single low-income capital scheme which will shift toward area-based delivery, learning the lessons from previous schemes, underpinned by a robust consumer protection regime and enhanced customer journey.
Read the strategy here: https://www.gov.uk/government/publications/fuel-poverty-strategy-for-england/fuel-poverty-strategy-for-england–2