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:

1. 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.
2. 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

As reported by Ofgem, OVO will pay over £2.7 million in redress after failing to provide Warm Home Discount (WHD) rebates to 11,646 customers by the statutory deadline of 31 March 2024.

These customers did not receive their rebate until November 2025 – more than 19 months late. The delay meant that some of the most vulnerable customers were left without the support they were entitled to during the coldest winter months.

Of those affected, 7,726 were on the Priority Services Register (PSR) meaning they are classed as vulnerable energy consumers, and 4,066 of those on the PSR were medically vulnerable.

OVO will pay a total of £2,765,200 in compensation directly to affected customers. This includes £150 for all impacted customers, an additional £150 for medically vulnerable customers, and £100 for each instance of self-disconnection between 31 March and 31 May 2024. All affected customers have been contacted by OVO and they do not need to take any further action, they will be compensated automatically.

Neil Lawrence, Director of Delivery and Schemes at Ofgem, said:

“The Warm Home Discount is a vital source of support for vulnerable energy consumers. Delays of this magnitude can cause real harm, particularly for those experiencing fuel poverty who also have medical needs. Suppliers must act swiftly and accurately to deliver these payments on time – where this does not happen, we will intervene and are prepared to take strong action.

“On this occasion, OVO fell significantly short of its obligations, though we recognise the positive steps the company has taken.

“We expect all suppliers to have robust processes in place and to act quickly when issues arise. Failures of this kind are unacceptable, and we will continue to intervene where necessary to ensure customers receive the support they are entitled to.”

Ofgem will continue to monitor all suppliers’ compliance with their obligations under the Warm Home Discount scheme and expects suppliers to make timely payments when consumers need them most, over the winter months.

• More than 250,000 families to receive confirmation of £150 discount off their energy bill due to extra help from government 
• Vast majority to receive discount automatically but some will need to provide extra details
• Prime Minister expands Warm Home Discount to an extra 2.7 million households this winter

More than a quarter of a million families will receive confirmation this week of their £150 discount on energy bills this winter, as part of the government’s drive to help families tackle energy affordability and put money into people’s pockets. 

The Prime Minister took the decision last year to expand the Warm Home Discount to a further 2.7 million families, meaning 6 million households now receive the help. 

Covering households across England and Wales, letters will start arriving from today, with all those entitled to the discount set to receive one before January. 

For the vast majority of recipients, £150 will be automatically deducted off their energy bill and they don’t need to take any action.  

However, some households will need to provide extra information to ensure they get the discount, with the letters advising them to call the helpline provided. They will need an electricity bill or statement to confirm the billpayer’s name and account number. 

It means around 6 million households will benefit this year, including 900,000 more families with children and a total of 1.8 million households in fuel poverty. 

Prime Minister Keir Starmer said: 

This cash injection will help people manage their bills while we fix the rusting energy system we inherited. 

Because it is only through our clean energy mission that we will get bills down for everyone in the long-run – creating jobs and economic growth along the way.

Energy Secretary Ed Miliband said: 

Letters will be dropping on doormats across the country this week containing welcome news for hundreds of thousands of families.

This government is determined to tackle energy affordability for families, and this winter more people will be helped as a result. 

And I would urge anyone who needs to provide extra information to follow the straightforward steps and make sure they get money off their bills this winter.

Every billpayer on means-tested benefits now qualifies for the Warm Home Discount, removing restrictions that previously excluded many who needed help and providing peace of mind to millions more families. 

Wholesale gas costs for consumers remain 75% above their levels during the year before Russia invaded Ukraine, and working people are paying the price. That is why we are getting Britain off the rollercoaster of fossil fuel prices and onto clean, homegrown power we control.  

 The only way to bring down bills for good is through government’s mission to get off the rollercoaster of fossil fuel prices and onto clean, homegrown power. Further proposals to support families will be announced in the Warm Homes Plan later this year.  

Eligibility

People in England and Wales will qualify for the Warm Home Discount this winter if they are receiving one of the following means-tested benefits and are named on the electricity bill, either in their own name, that of their partner, or their legal representative.  

• Housing Benefit  
• Income-related Employment and Support Allowance (ESA)  
• Income-based Jobseeker’s Allowance (JSA)  
• Income Support  
• Pension Credit (Guarantee Credit and Savings Credit)  
• Universal Credit

Around £240 million of unclaimed credit balances in closed accounts are waiting to be returned to consumers, according to data from energy regulator Ofgem. 

Consumers who have moved home in the last five years are being encouraged by Ofgem and Energy UK, the body which represents suppliers, to check letters and emails for final bills and contact their supplier if they think they could be due money.  

The latest Ofgem figures show 1.9 million closed accounts still have credit in them. All customers have to do to check if they are owed money is to contact their suppliers or log into old accounts.  

Suppliers always try and get any outstanding credit balances back to consumers when they close an account, but if the person moves on and doesn’t update them with onward contact details, it becomes almost impossible.  

More than 90% of closed account balances are returned automatically according to Energy UK, and suppliers want to ensure all consumers get what they are owed. 

Tim Jarvis, Director General for Retail at Ofgem, said:  

“Moving house requires a lot of life admin – and it’s understandable that some things will be missed. But with almost 2 million closed accounts currently in credit, the message is clear – if you’ve moved in the last 5 years, reach out to your old supplier, provide them with the correct information, and you could be due a refund.  

“Suppliers work very hard to return money to people when they close an account – due to the rules Ofgem has put in place, it’s in their interests to do so. However without the right contact details, they’re stuck. That’s why we’re working together to get the message out and return money to the people entitled to it.” 

Ed Rees, Energy UK’s Head of Retail Policy, said: 

“We know that energy bills remain a challenge for many households and suppliers are working hard to support customers, including making sure any credit on closed accounts is quickly returned. It’s always important to keep your contact details up to date so your supplier can provide support when you need it and so they can also then return unclaimed funds promptly. 

“There are a range of easy ways to get in touch, including email and webchat, and we’d encourage customers to contact their supplier if they need help or advice. If you’re moving, switching or closing an account, remember to keep your direct debit active until your final bill has been settled to avoid leaving money unclaimed.” 

Under Ofgem’s Guaranteed Standards of Performance, suppliers must issue a final bill within 6 weeks and refund within 10 working days – but missing customer details are delaying this.  

Consumers are being urged to check if they received a final bill and refund after switching suppliers or moving, and contact their old supplier or log into their old online account if you had one.  

When contacting suppliers, consumers should share full name, previous address, account number (if known), switch details, and contact information to help locate old accounts. 

Suppliers already work to minimise balances and return account balances to consumers. This includes by: 

• Avoiding account balance build up by engaging with customers whose balances are rising  
• Attempting to take accurate final meter reads  
• Asking new tenants for forwarding addresses for previous tenants  
• Creating easy application routes to return balances from cheques and via company websites and exploring other contact channels, such as increased use of email and Post Office Cash Out Vouchers  
• Settling estates for bereavements and the completion of probate  
• Using customer contact and third-party tracing with credit reference agencies for even relatively small balances after a period they are likely to have built up a new profile. This can take up to 9 months.   

Without the correct details, though, some account holders can’t be contact – so speaking to old suppliers is critical.  

Call to action 

Ofgem and suppliers are sending out a clear message – if you’ve moved in the last five years, phone your suppliers or log into old accounts to update details – you may be owed money.  

A scheme to tackle historical debt built up during the energy crisis could help around 195,000 customers by writing off up to £500m, Ofgem announced today.

The regulator confirmed a final consultation on the first phase of its Debt Relief Scheme will be published shortly as part of its plans to help consumers and support suppliers to bring down £4.4bn of debt in the energy system. 

The costs of recovering this debt, and in the worst case writing it off, are spread across everyone’s bills. That’s why Ofgem is moving forward with proposals that aim to bring debt down and reform the way energy debt is managed to prevent it building up again while protecting the most vulnerable.

Other steps include plans to trial changes to the process households must follow when they move into a new property. Currently when someone moves into a new home, energy accounts are switched to ‘occupier’. Bills build up under these anonymous accounts until the individual contacts a supplier to register. This is in contrast to the way this process works in many other countries across Europe, where consumers are required to set up energy accounts to get on supply.

In the worst-case scenario this debt – which suppliers estimate accounts for between £1.1 and £1.7bn (up to a third) of the historic debt currently in the system – is never paid and is written off. This is recovered via the debt allowance that is included in everyone’s bills, currently adding £52 under the current price cap. 

The proposals will include several safeguards to ensure consumers in vulnerable situations are protected, alongside measures to ensure support is targeted at those who need it. This could include adding credit to the smart meter when it is moved to prepayment mode for new tenants or homeowners, which would ensure they remain on supply while setting up an account with an energy supplier. 

Charlotte Friel, Director for Retail Pricing and Systems at Ofgem, said: 

“We know the growing amount of debt in the energy system is a significant challenge – for those that are living with the significant stress of being in debt, for households that ultimately face higher costs on their bills to cover the debt that can’t be recovered, and for the industry that is limited in its ability to innovate and invest because of the costs of debt.

“We must protect consumers by striking the right balance between making sure those that can pay are supported to do so, and targeting support at those who need it most. These proposals will both directly reach households and relieve the burden of unmanageable debt, while also making changes to the way that debt is managed in the sector. 

“This is a challenge that requires us all to work together across industry and government to deliver a fairer system that works for current and future consumers.”

Further changes from the regulator also include a new ‘Know your Rights’ document for consumers setting out what suppliers must do to support households struggling with debt.

The first phase of the Debt Relief Scheme, expected to launch in early 2026, will focus on people in receipt of means-tested benefits with more than £100 of debt built up between during the energy crisis (April 2022 to March 2024).

Eligible households will be expected to be making some contribution towards their debt or ongoing energy use, or if they are unable to do so at this time, be willing to work with a debt advice charity to seek help managing their debts. They would also be identified automatically and contacted by suppliers.

The regulator will publish consultations on the proposals in the coming weeks, with the aim of the Debt Relief Scheme being implemented early 2026.