Energy bills are at risk of rising again — Government action can’t wait.

As we approach the May price cap, households across the country will be bracing themselves for energy bill rises alongside a broader cost of living crisis.

The Government’s action in the Autumn Budget to remove some policy costs from energy bills was welcome and contributed to the fall in the last price cap. However, the current conflict in the Middle East is likely to offset these savings. Rising wholesale costs linked to the geopolitical tensions are expected to push energy bills up once again.

Household budgets are already at breaking point. Too many households are struggling with debts from the previous crisis, which they now have to manage alongside the threat of renewed price rises. Our latest affordability survey, commissioned by Yonder Consulting, found that energy affordability remains one of the most pressing financial challenges people face today. A quarter (25%) of households say they find it difficult to reliably afford their energy bills.

Our cost of living tracker is a survey we’ve been running since 2020 to ask people about their financial situation and cost of living pressures. We use this data to compare how people’s finances have changed over time. In this tracker, we found that 15% of households are now behind on their energy bills — that’s 4.35 million households unable to afford their energy bills, a rise of 1.8 million households since 2022.

These affordability challenges are not felt equally. Our cost of living tracker found that households on Universal Credit (UC) are three times as likely to be behind on their gas and electricity bills than households not on UC. For households where a household member receives UC and has children, the risk of being unable to afford energy is further compounded, with 37% being unable to, compared to 26% of all households with children.

Alongside households on UC and those with children, we also know that disabled people find it difficult to afford their energy bills. 1 in 5 households (20%) with a disability or long term health condition are worried about affording their energy bill over the next 6 months, compared to 15% of those without a disability or long term health condition.

As energy prices never returned to the level they were before they skyrocketed in the last energy crisis, households have had to adapt to these higher bills, with those unable to do so becoming snowed under by debt. In June 2022, our clients had on average, under £1,000 of energy debt. This has increased by 81% to £1,750 as of March 2026.

Among those in energy debt, the situation is particularly stark. Our affordability survey found that a quarter say they can rarely or never afford their essentials. Some are being forced to engage in dangerous coping strategies to manage their debt, with our affordability survey finding that four in ten (40%) had used less heating even when it was cold, and nearly a third (30%) had turned off their heating in cold weather.

Many households simply do not have enough income to cover their basic costs, meaning they are in a negative budget. Over half of our debt clients are in a negative budget, even after maximising all available support — up from a third in 2019. In the same time, the average monthly shortfall of a household in a negative budget has gone from -£270 in 2019/20, to -£365 now. Not only are more people falling behind, but they are falling even deeper into debt.

To ensure households don’t face another difficult winter, the Government must introduce tailored support to reach those most at risk. This support should be automated to allow high uptake, targeted at where it is needed most — for example, households on UC and disabled households — and delivered in a way that it doesn’t exclude people on certain heating technology, such as heat networks.

The conflict in the Middle East poses a real risk of unaffordable energy bills. Many households are still struggling to recover from the last energy crisis. Households who are already struggling with their energy debt will be at risk of falling even deeper into debt as they try to keep up with the increase of their ongoing usage. Without intervention, the upcoming crisis could be worse than the last due to precarious financial situations households are in.

Urgent action from the Government is needed now.

To support households, especially those most at risk, ahead of winter, the Government must take action by:

• Reforming the Warm Home Discount so that it is tailored to a household’s energy needs. Those with the highest energy needs should receive £710, those with median needs should receive £510, and those with the lowest needs should receive £310. This will help 600,000 households to no longer spend 10% of their income on their energy bills — therefore no longer being classified as ‘fuel poor’.
• Delivering the energy Debt Relief Scheme (DRS) at pace. The latest delays to the scheme are keeping households stuck in a vicious cycle of debt. Ofgem and the Department for Energy Security and Net Zero (DESNZ) have already designed a well developed scheme to target those with energy debt. We want to see this scheme delivered as soon as possible.
• Fixing data matching so that targeted support can be delivered to households in need outside of the benefits system.
• Taking further action to reform energy levies. Removing costs such as the Feed-in-Tariff (FIT) and the remaining Renewables Obligation (RO) from electricity would help reduce costs for consumers, especially those on lower incomes who spend a higher proportion of their income on energy.

The coming months present a crucial window. The Government should take these actions now to ensure households most at risk are protected before the winter months.