Tag: Energy Bills

Another Winter, same crisis: Energy bills stay high as profits soar

As the UK braces for another winter of cold weather warnings, the Ofgem price cap for January to March 2026 has been announced.

Average energy bills will come in at £1,758. This is £3 higher than current levels, with bills remaining over £700 above 2020 levels and £190 higher than at the General Election in July 2024.

Meanwhile the energy industry has posted more than £40bn in UK profits in the last two years. With the Budget days away, the Government faces a defining choice.

A spokesperson for the End Fuel Poverty Coalition, commented:
“Energy bills remain stubbornly high as households face a fifth winter of the energy costs crisis. Today’s announcement sees standing charges rise yet again, highlighting the structural challenges in how energy is paid for.

“The addition of a new levy on bills which pays for nuclear power stations is unwelcome and could have been delayed until closer to when these plants actually start to generate electricity.

“Today’s Ofgem announcement keeps the average energy bill at almost £700 above the levels of winter 2020/21 and £190 more than at the 2024 General Election.

“Despite many people living in cold damp homes, the energy industry has posted more than £125 billion in profits in the UK alone in recent years.

“Yet some business lobbyists have called for the Chancellor to end the Windfall Tax. Instead, next week’s Budget is a chance for the Government to finally get serious about ending fuel poverty.

“We need long-term investment in energy efficiency, not short-term thinking. We need action to bring down electricity prices, not excuses. And we need a fair tax regime that puts people before profiteers.

“If the Government truly wants to cut bills and protect the public, it must fully fund the Warm Homes Plan, continue to improve our energy security, introduce a fair social tariff, and reform our broken energy pricing system.”

Energy bills could remain £691 a year higher than 2020

Media reports suggest average household energy bills might drop slightly from 1 January 2026. Experts at Cornwall Insight have said that the Ofgem price cap is expected to dip by 1%, taking an average bill to £1,733 a year.

This figure remains £691 higher than before the energy bills crisis started.

A spokesperson for the End Fuel Poverty Coalition, commented:
“As cold weather warnings are issued across the UK, energy bills remain at crisis levels while energy giants have generated over £125 billion in profits on their UK operations since the energy crisis started.

“Millions of households are already rationing their heating to stay afloat, and with temperatures dropping sharply the risks to people’s health and safety are becoming severe.

“After five winters of sky-high bills, families cannot be expected to cope with this alone. We urgently need reduced electricity bills and targeted financial support for those most at risk, alongside a fully funded national programme of insulation and energy-efficiency upgrades to keep homes warm.”

UK energy industry profits surge past £125bn since 2020

Energy giants have generated over £125 billion in profits on their UK operations since the energy crisis started according to an analysis of company reports. [1]

Around £40bn has been made in profit in the UK by just 27 energy firms in the last two years, yet there are continued calls from energy industry lobbyists to axe the Windfall Tax in the next Budget.

Researchers working for the End Fuel Poverty Coalition examined the declared profits firms ranging from energy producers (such as Equinor, Shell) through to the firms that control our energy grid (such as National Grid and UK Power Networks) as well as suppliers (such as British Gas) and energy trading firms (e.g. Vitol).

The total profits generated globally by the firms since 2020 stand at over half a trillion pounds, with over four-fifths (£466bn) generated by firms with extensive involvement in the gas industry. 

This is despite the fact that the gas sector will no longer be able to meet heating demand using only domestically extracted gas by 2027 and as just 14% of the North Sea reserves are now commercially viable according to official statistics [2]. 

Further analysis shows that as households face a fifth winter of sky high energy bills, over £50bn of the profits over five years are generated by electricity and gas transmission and distribution firms. 

These are the “network costs” consumers pay for maintaining the pipes and wires of the energy system and are usually paid for through standing charges on energy bills. The firms were recently criticised in a report by the House of Commons Energy Security & Net Zero Committee.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Energy firms continue to post multi-billion pound profits while millions of households struggle to afford to heat their homes. 

“The figures equate to £878 per household, per year in profit. At the same time, average annual energy bills have soared from £1,042 in 2020 to £1,755 today, after peaking even higher in early 2023. [3]

“Even after the temporary windfall tax, oil and gas giants have benefited from exceptional earnings driven by global price spikes, which stands in stark contrast to record energy debt and record levels of fuel poverty. 

“The Chancellor must resist pressure to provide a tax cut to the energy industry in the budget and ensure that the system captures excess industry profits fairly and directs revenues to protect vulnerable households and improve the energy efficiency of the nation’s coldest homes.”

Robert Palmer, Uplift Deputy Director, said: 

“It is scandalous that oil and gas companies raked in billions in recent years whilst millions of people in the UK still struggle with sky high energy bills.

“Worse, these huge profits aren’t going to support the UK’s energy workers, who are being laid off as the North Sea declines, they’re going to overseas shareholders.

“It’s clear this status quo of continuing to prop up the profiteering oil and gas industry with evermore generous public handouts can’t continue. Rather than give into lobbying by oil and gas bosses for tax cuts, the Chancellor needs to focus on the UK’s long-term energy future.

“That means investing in the UK’s renewable energy industries and supporting workers into secure, long-term jobs that actually serve the UK’s needs and bring down bills permanently.”

Faiza Shaheen, Executive Director at Tax Justice UK said:

“Energy companies’ billions in excess profits are extracted from the pain of millions struggling with the soaring costs of energy and essentials.

“Capitulating to industry lobbying and axing the windfall tax would be an unacceptable decision by the Chancellor, and a sign this government is on the side of the profiteers rather than the public. She must use the Budget to properly tax energy companies and big polluters, and invest in bringing down energy bills for ordinary people.”

ENDS

[1] The data in this tracker has been collated from publicly available company reports and industry sources, with profits adjusted where possible to reflect UK operations. For multinational businesses, UK profit estimates are based on disclosed proportions of revenue, production, or operating assets attributable to the UK, or on reasonable assumptions using sector benchmarks where disclosure is limited. The figures are indicative, providing a consistent basis to assess trends in UK energy-sector profitability and its relationship to household energy costs. These measures differ from company to company due to reporting processes and regulatory requirements in different jurisdictions. In determining which measure of profitability to use, the research has prioritised the measure preferred in the company’s own accounts. The totals declared here include offsetting any losses made by some of the firms in some years of the period examined. 30 firms were monitored, with 27 making a profit over 5 years. These firms were selected by the researchers to create a cross section of the energy industry and to reflect those most frequently covered in the media.

Full information available at: https://www.endfuelpoverty.org.uk/news/energy-firm-profits-tracker/ 

Data as at 12 November 2025.

The data was compiled by freelance business journalist David Craik and examined and peer-reviewed by a business analyst with board-level experience within complex multinational businesses. 

David’s experience has included writing business and city news and features for national newspapers and magazines such as The Daily Mirror, Sunday Times, Wall Street Journal, Scotsman and Daily Express. Much of his content focuses on company financial results and reports in the energy sector and on personal finance issues including wealth management, property, investing and managing household budgets and bills.

[2] https://www.endfuelpoverty.org.uk/north-sea-gas-unable-to-meet-national-heating-needs-from-2027/ 

[3] £125.7bn in profits divided by 28.6m UK households (ONS) is £4,394 over the course of the 5 years of the energy bills crisis or £878 a year. Ofgem price cap figures from https://www.endfuelpoverty.org.uk/about-fuel-poverty/ofgem-price-cap/ 

Chancellor mulls £6bn tax cut for gas firms while slashing warm homes budget

Changes to the windfall tax being considered by Rachel Reeves in this month’s budget could see the oil and gas industry handed a £6 billion tax cut, whilst promised investment in energy efficiency to cut household bills is potentially going to be slashed by the same amount (£6.4bn). 

With tax increases for working people also widely expected, any roll-back on funding for warm homes would represent yet another broken manifesto promise from this Chancellor, say campaigners. 

According to media briefings reported by The Guardian, the Treasury is considering diverting funding from the £13.2 billion Warm Homes Plan — a programme designed to improve cold, damp homes and permanently lower household energy bills — in order to fund short-term energy bill support.

The proposed move would effectively cut the UK’s energy efficiency budget by 40% over five years by substituting parts of the Warm Homes Plan for existing schemes.

Meanwhile, proposals drafted by the oil and gas lobby group Offshore Energies UK, which are being considered by the Chancellor, suggest that removing the Energy Profits Levy at the end of this year, as the industry is pushing for, would lead to a tax loss of £6 billion to the UK Treasury over the next decade.(1) 

The oil and gas industry has been lobbying hard for months to scrap the windfall tax in order to reduce their tax bill, despite the sector posting billions in profit, and companies like Shell reporting negative UK taxes last year.

In response to the proposed tax cut, Robert Palmer, deputy director of Uplift said:

“Oil and gas companies have made billions in recent years while millions of people in the UK have struggled with unaffordable energy bills. Worse, firms have chosen to hand these windfalls to overseas shareholders rather than reinvesting them to support UK jobs. To even be considering scrapping measures to cut household bills while cutting taxes for profiteering oil companies would be deeply unfair.” 

Palmer also called out the poor economics of the basin and warned Reeves against propping up an industry that is only profitable because of the UK’s generous tax regime.

“The reality is the North Sea is in rapid decline, with most of the gas already burned – and what’s left is increasingly expensive to extract. New drilling is only viable if we hand out even bigger tax breaks to wealthy energy companies, taking money away from public services. Quite apart from the climate impact, it is economic lunacy to continue to allow drilling that would not be viable without the Treasury’s thumb on the scale.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“Giving tax breaks to fossil fuel giants and failing to collect tax from large corporations while cutting support for those in fuel poverty are short-term acts of weakness by the Chancellor.

“We obviously understand the urgent need to cut energy bills, but the Chancellor – who previously brought us the Winter Fuel Payment fiasco – is not thinking things through. Taking action to improve energy efficiency helps to cut  bills in the long run, protect health and reduce our dependence on expensive fossil fuels. 

“It’s entirely possible to bring down energy bills in a fair way — by improving insulation, reforming electricity pricing, and using public investment to upgrade our grid. Instead, we’re seeing the Government ignore long-term solutions while considering tax cuts to those who need them least.”

The latest data shows that around 12.1 million UK households are struggling with unaffordable energy bills, with 5 million of those in deep fuel poverty — spending over 20% of their income on energy.

Annabel Rice, senior political adviser at Green Alliance, said: 

“If the government is serious about lowering people’s bills for good, they must invest in insulating our homes, not raid schemes that have helped families lower their energy costs to make their sums add up in the budget. 

“We’ve seen more than five different insulation schemes from the government in recent years in England and they show us one thing: stop-start policies confuse homeowners, make jobs in this industry less viable and create uncertainty for investors. With almost nine million families in fuel poverty as winter approaches, it’s time for a fully funded, long term Warm Homes Plan.”

The Warm Homes Plan had been expected to support a wide range of upgrades including insulation, heat pumps, home energy advice, and local council-led retrofit schemes. It was announced as a cornerstone of the UK’s mission to reduce energy demand, support vulnerable households, and cut carbon emissions.

But experts warn that diverting its funds to cover existing schemes will drastically limit its impact, especially for households living in the worst conditions — and risks undermining the Government’s own statutory targets to end fuel poverty by 2030.

Jonathan Bean, campaigner at Fuel Poverty Action, said:

“The Government should be focussed on getting homes fixed, and replacing the failed Eco4 scheme with a well funded home upgrade program that delivers high quality work and guaranteed bill savings.  We need a bigger investment in retrofit skills and quality control, not a budget cut that ends up in the pockets of the oil and gas giants.”

MPs back major reforms to energy bill support

MPs on the Energy Security and Net Zero Committee have backed a series of reforms to make the energy system fairer and support households facing a fifth winter of high bills.

In a major report on tackling the energy cost crisis, MPs recommended a permanent energy debt relief scheme funded through energy sector excess profits, automatic support for vulnerable households, a social tariff for energy and reforms to the Warm Home Discount. 

The Committee also called for urgent action to fix unfair standing charges, improve data sharing to target support and overhaul Cold Weather Payments to ensure help reaches those who need it when temperatures drop.

Crucially, the Committee echoed the Coalition’s warnings about the growing energy debt crisis and proposed a structured, long-term solution to write off unpayable arrears without passing costs onto billpayers. 

It also urged the Government and Ofgem to act quickly to rebuild trust in the energy market, strengthen consumer protections and ensure households are not penalised for reducing gas use as the energy system transitions.

A spokesperson for the End Fuel Poverty Coalition, commented:

“This report should be used to mark a turning point in the fight to end the energy cost crisis. The cross-party group of MPs have recognised what millions of households already know – our energy system has been stacked against people struggling to heat their homes and urgent change is needed.

“We are particularly pleased that MPs have backed the principle of energy debt relief funded through excess profits in the sector, alongside a social tariff, reforms to standing charges and improvements to the Warm Home Discount and Cold Weather Payments. These are landmark recommendations that could protect the most vulnerable.

“As this report makes clear, warm homes must be treated as a public health priority, with fair pricing, modernised winter protections, social tariffs and stronger rights for renters.

“If the Government is serious about implementing change, the Warm Homes Plan announced next month must be the first step. That means a £13.2 billion plan to create warmer and safer homes for those most in need, independent quality checks, skilled green jobs, trusted local advice services and prioritisation of the lowest-income households in the coldest homes.”

In responses to Government consultations, charities and fuel poverty experts have set out the key tests the Government’s forthcoming Warm Homes Plan and Fuel Poverty Strategy must meet. These include:

  • Treating warm, safe housing as a public health priority and retain the target to end fuel poverty by 2030
  • Adopting a 10% fuel poverty measure (after housing costs)
  • Committing to a 10-year national retrofit programme, agreed across parties, backed by skilled jobs, apprenticeships and national standards
  • Prioritising the Worst First — low-income households in the coldest, least efficient homes
  • Guaranteeing independent retrofit assessment, performance monitoring and consumer protections
  • Providing free, trusted local advice services and one-stop-shops for households
  • Funding delivery through public spending, not new levies on bills
  • Introducing targeted financial support including modernised cold weather payments and social tariffs
  • Empowering local authorities with data access and funding to lead street-by-street schemes
  • Protecting tenants from “retrovictions” and unfair rent rises

The spokesperson added:
“Warm homes are a basic right. This must be the moment the Government finally commits to a long-term plan to end fuel poverty — not just improve averages or fund short-term schemes.

“We need a decade-long Warm Homes Plan that delivers real-world warmth, safety and affordable bills, backed by independent quality checks, trusted advice and proper protection for tenants and consumers.

“After years of delays and stop-start programmes, it’s time to get on with delivery and ensure support reaches those in deepest need first.”

ENDS

The full report can be read here: https://publications.parliament.uk/pa/cm5901/cmselect/cmesnz/736/report.html

The End Fuel Poverty Coalition’s evidence to the inquiry can be read online.

Half-hour billing reform must not harm vulnerable households

Some energy customers will soon see the benefits of a switch to a new system for energy bills that will lead to more accurate and transparent bills, cost savings through new ‘time-of-use’ tariffs, and better integration of renewable energy sources.

The Market-wide Half Hourly Settlement (MHHS) programme is designed to help modernise the UK’s energy sector by providing more detailed consumption data – taking readings from customers’ electricity meters every 30 minutes – instead of the current monthly frequency.

However, concerns have been raised about the impact on vulnerable households [letter to Ofgem pdf] and the discriminatory nature of only making the tariffs available on smart meters.

A spokesperson for the End Fuel Poverty Coalition, commented:

“We must ensure that electricity pricing is fair and that everyone can access cheaper ‘time of use’ tariffs.

“Millions of people have already been left behind in the smart meter rollout, and it is vital that the energy industry urgently fixes problems with existing meters and properly compensates customers for failures.

“Outstanding smart meter faults can block access to cheaper tariffs altogether, meaning some households are penalised week after week through no fault of their own.

“The biggest issue we see is when smart meters don’t communicate with suppliers — a problem that lies with the Data Communications Company (DCC) who have been paid millions from our bills yet still don’t operate a fully working system.

“And with North Sea gas production in steep decline and the UK set to rely on imports for 94% of its gas by 2050, we must be accelerating efforts to reform electricity pricing — not embedding unfairness.

“Access to smart tariffs must be universal, and smart meter failures must not become a reason why the most vulnerable pay more for energy.”

Energy bosses warn of further bill increases in evidence to MPs

Electricity prices could increase by a fifth, according to evidence given to MPs by energy company bosses.

The “big six” energy suppliers were questioned by the House of Commons Energy Security and Net Zero Select Committee about energy bills.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It’s highly concerning that energy bosses have painted such a bleak outlook for energy bills in coming years.

“With over 12 million households struggling with the cost of heating and energy debt at record levels, it’s clear that electricity pricing must be fairer, standing charges reduced and that the Government must look at how any vital investment in energy infrastructure is paid for.

“Ministers and the regulator should set out a clear long-term pathway so that the public knows what the fixed costs of the grid are likely to be, what schemes will be available to help improve energy efficiency and what financial support will be in place to help those in fuel poverty.

“The nation’s energy system is going through huge changes to improve energy security, meet demand* and bring down the cost of generating energy. But as this change happens, the Government mustn’t forget about households struggling through a fifth winter of high bills.”

The End Fuel Poverty Coalition’s written evidence to MPs on the Committee Inquiry [pdf] highlighted how the energy system is unfair by design — with standing charges, supplier failures and gas-linked pricing hitting low-income households hardest.

The evidence recommended:

  • Fairer pricing that reflects cheap renewables

  • A fully funded £13.2bn Warm Homes Plan

  • Social tariffs & lower standing charges

  • A regulator that prioritises bringing down energy bills

*Even the lowest prediction by the National Energy System Operator suggests that electricity demand will increase by 93% between now and 2050.

Lessons must be learned from the NAO’s damning insulation report

The National Audit Office has found that poor oversight of the Energy Company Obligation (ECO) allowed sub-standard contractors to install faulty insulation in thousands of homes.

98% of homes that had external wall insulation installed under the schemes run by the previous government have problems and 29% of homes that were given internal insulation also need it fixing.

This amounts to around tens of thousands of installations that may have been defective, leaving households in cold, damp conditions.

Anyone affected by the scandal should contact the Ofgem ECO helpline on 0808 169 4447 or ECOhelp@ofgem.gov.uk.

A spokesperson for the End Fuel Poverty Coalition commented:

“The report reveals a system that has let cowboys through the front door, leaving thousands of victims living in misery and undermining public trust in efforts to tackle the cold damp homes crisis facing many households.

“Insulation and ventilation, when done properly, are among the safest and most effective ways to bring down energy bills and keep people warm. But sub-standard delivery and weak oversight by the last Government has turned what should have been a national success story into a cautionary tale.

“Now we need to fix the system, not abandon it.

“The government’s Warm Homes Plan must guarantee quality, with properly trained installers, independent inspections and rapid remediation if things go wrong.

“Only by getting insulation right, alongside a clear plan to move homes off volatile gas prices and targeted financial help for those struggling with their bills, can we end the scourge of cold, damp homes once and for all.”

James Dyson, Senior Researcher at E3G added:

“Every person who has been failed by this scheme deserved better; a warmer home which is cheaper to heat, delivered by competent tradespeople.

“Instead, the Conservatives’ time in office has delivered the British public yet another systemic failure in our public services. Everyone washed their hands of responsibility, from the government watchdog to energy companies and cowboy builders.

“The new government has a chance to put things right, it must move urgently to help the people affected to repair their homes at no extra cost and put in place high insulation standards to ensure this never happens again.”

Meanwhile Fuel Poverty Action’s Jonathan Bean said:

“This scandal exposes shocking levels of negligence by Government, Ofgem, Trustmark and energy firms.  They have allowed rogue contractors… to exploit the £4 billion added to our energy bills [to pay for the scheme], and damage the homes of tens of thousands of mostly vulnerable people.

“Instead of the warm homes and lower bills Government promised, people had their homes and lives destroyed.

“Now [we see] a weak Government response, allowing the scheme to continue, only checking some homes and measures, and fixing even fewer.

“Decisive action is needed instead. All homes must be checked, and all damage and faults fixed. Not just insulation, also roofs that have been damaged by solar panels and heat pumps that don’t work properly. ECO4 should be halted and replaced by a scheme with proper quality control and protections for residents. Victims must not be left suffering through another winter in cold, damp, damaged homes whilst cowboy contractors enjoy their huge profits.”

Anyone with poorly installed ECO4 work in their home can also contact Fuel Poverty Action via its website to take action.

Chief executive of charity Severn Wye, Sandy Ruthven MBE, commented:
“The figures are eye-watering but by themselves don’t tell the full story of fuel poverty and the experience of day-to-day living in a cold, damp and unhealthy home.

“External wall insulation is fitted to homes that have solid walls. Done well, it keeps heat in and cold out, but done badly it creates ideal conditions for damp and mould to grow inside. This is an unsightly nuisance at best but can be an immediate threat to health and in extreme cases can kill.

“The report’s findings that almost all external wall insulation and nearly one third of internal wall insulation need repair is hard to comprehend. But we know from the calls we receive into our advice line and home visits, that coping with shoddy installations has a devastating impact on health and wellbeing.”

Gas and electricity winter outlook highlights fragile energy security

A new report from National Gas that reveals a decline in Britain’s gas storage capacity, driven by the shutdown of the Rough site which is owned by Centrica, increases the UK’s reliance on imported liquefied natural gas (LNG) during periods of high demand.

Recent deals struck by Centrica means the firm controls c.10% of gas needs and also now owns the Grain LNG import facility in Kent.

The National Energy System Operator’s winter outlook report suggests that electricity supplies for the winter looked mostly healthy, but with a risk of some “tight days”.

A spokesperson for the End Fuel Poverty Coalition commented:
“Britain’s energy security should never depend on the commercial decisions of one private company. Yet with Centrica controlling vital gas infrastructure and imports, the country is now exposed to their boardroom choices.

“By refusing to refill Rough ahead of winter, Centrica has effectively weakened one of Britain’s key defences against cold snaps and price spikes. This leaves households more reliant on expensive imported gas and more vulnerable to market volatility.

“This also highlights that, even if new gas fields are approved, the North Sea will be unable to produce enough gas to cover our home heating needs by 2027 – leaving the country reliant on imports.

“The Government must not leave our energy security to chance.

“Alongside treating gas storage as critical national infrastructure, we also need to continue the shift away from gas by investing in homegrown renewable power – so we’re no longer at the mercy of fossil fuel markets.

“But to support this shift, we must also ensure the electricity system is ready and reform electricity pricing. While National Grid expects sufficient capacity this winter, there will still be tight days where supply and demand are finely balanced. Expanding renewables and electricity supply is essential if we are to meet future demand from cleaner heating and ensure a secure, affordable energy system for all.”

Scrapping UK climate law will not reduce energy bills

Plans by the Conservative Party to replace the Climate Change Act have come under fire for locking Britain into costly gas imports at a time when North Sea reserves are rapidly running out.

Environmental groups also condemned the move, with the E3G think tank describing it as “a monstrous act of economic and environmental vandalism.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“Kemi Badenoch says that the Conservatives want to put ‘economic growth and cheap energy first’, but there is no way to lower bills or energy security by prolonging our dependence on gas.

“By 2027, the UK will not be able to produce enough gas to heat our homes. And, even if new gas fields are approved, by 2050 the country will be left almost entirely reliant on gas imports as the level of reserves in the North Sea gas basin continues to deplete.

“Keeping households hooked on gas – which we will have to import at global prices from countries such as Trump’s America and Qatar – will only increase the profits of global firms and increase the misery of people unable to afford the sky-high prices.”