Over 12 million UK households struggling with energy costs as campaigners call for price cap cut

AUGUST 26, 2025

The number of UK households struggling with the cost of their energy bills has hit 12.1 million as campaigners warn Ofgem that people cannot take any more price increases.

With the latest price cap announcement due on Wednesday (August 27th), experts say even the one percent increase predicted will lead to further suffering. The next rise will come into force in October and cover the period until the end of 2025 before prices will change again from January 2026.

Over two fifths of UK households are struggling with energy bills and spending more than 10% of their household income on gas and electricity, based on the research by the University of York. Of these, almost 5m households spend more than 20% of their income on energy, meaning they are in deep fuel poverty.

The figures also enable a comparison between the constituent parts of the UK. Northern Ireland and the West Midlands have the highest poverty rates, followed by Scotland and the North East. Meanwhile, the lowest rates are in Wales, the South West and Eastern England.

The data also reveals types of households which will be hardest hit by any price rise. Households with children are the most likely to be struggling with their energy costs as are people who rent their homes. There is also a correlation between the lower the council tax band and the higher the fuel poverty rate.

3.2 million of those in fuel poverty are pensioner households, with 964,000  pensioner households in deep fuel poverty, meaning they spend more than 20% of their income on energy. 

Meanwhile official figures also reveal that the level of energy debt is still increasing to an all-time high, with millions of households owing a combined £4.15bn in debt.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Fuel poverty is very much still with us and these figures highlight how vital schemes like the Warm Home Discount are to help those struggling each year. But we are now approaching the fifth winter of the energy bills crisis and the time for tinkering with the price cap is over.

“The average household is still paying 67% more for their energy than in winter 2020/21. Ofgem is right to launch a comprehensive review of how energy system costs are allocated, but simply shifting budgets between standing charges and unit rates will not solve the problem. 

“We also need to realise that the North Sea is now in terminal decline and unable to meet the UK’s long-term heating needs. This means we must urgently plan to cut our dependence on gas and bring down the cost of electricity.  Failure to act will lead to even greater reliance on gas imports, reduced energy security and increased energy bills.

“As well as looking at the price cap, we need to scrutinise the profits made by transmission and network companies, while Ministers must step in to ensure investment and funding decisions bring down the cost to bill payers of maintaining our vital infrastructure.”

Campaigners are now urging the Government and Ofgem to look at other ways to raise revenue for network improvements and point to the half a trillion pound profits made by energy companies since 2020 and the £4 billion in excess profits energy networks pocketed after a regulatory decision.

Uplift Executive Director Tessa Khan commented: “This is unwelcome news for the millions of people who find themselves in fuel poverty, even before it begins to turn cold.  The primary cause of the years of persistently high energy prices is the UK’s dependency on gas to generate electricity and heat our homes – which at its peak was three times higher than pre-crisis levels and remains almost double what it was. 

“Oil and gas firms, who are lobbying against the shift to homegrown renewable energy, want it to stay this way so they can continue to make billions at our expense. Any politician who sides with these profiteering oil giants – and opposes the insulation of homes and building of more renewables – is working against the interests of UK pensioners, families and anyone else struggling with unaffordable energy bills.” 

Jonathan Bradshaw, Emeritus Professor of Social Policy and Social Work at the University of York, said: “Official statistics on fuel poverty don’t show the full picture of suffering caused by high energy bills. Our research uses benchmark official figures on living standards along with energy tariff data and statistical models to estimate the impact of energy costs on the population as a whole and on different groups of people. 

“While the data shows a slight reduction in the numbers of households struggling compared to 2022/23, it is clear that fuel poverty is still with us.” 

Government urged to prioritise warmth first in £13.2bn home upgrade plan

Meanwhile, the End Fuel Poverty Coalition has written to the Minister for Energy Consumers, urging the Government to ensure its £13.2 billion Warm Homes Plan delivers real, lasting benefits for people living in cold, damp and unaffordable homes.

In a detailed briefing also shared with key departments across Whitehall, the Coalition outlines a series of reforms to ensure the landmark retrofit scheme improves lives, protects health and cuts bills for those who need it most.

The Coalition says the success of the scheme should be judged not by how many insulation measures are installed but by how far it goes in ending fuel poverty.

A spokesperson for the End Fuel Poverty Coalition, said: “This is a huge opportunity to fix a scandal that’s been hurting millions of households for years and years. Cold homes cause suffering, cost lives and drive up costs for the NHS. The Warm Homes Plan can be the solution – but only if it’s designed around the real needs of people, not just technical targets.”

The Coalition is calling for the Plan to be rooted in a “Warmth First” principle, treating a warm, dry and affordable-to-heat home as a basic human right. It says the programme must include a “Warm Home Guarantee” to track actual comfort and bill savings, and ensure high-quality installations delivered by skilled local workers. 

It also urges the government to fund trusted, face-to-face advice services to help residents through the retrofit journey and access benefits, energy support and legal protections.

The briefing also warns ministers against diverting Warm Homes Plan money into existing schemes, or using it to cut electricity prices for wealthier households. Instead, it argues affordability reforms like levy rebalancing should be funded separately, to avoid punishing low-income households who still rely on gas heating.

In its recommendations, the Coalition draws on lessons from successful past initiatives like the Warm Zones scheme, which provided hands-on support, repeated outreach, and direct help accessing income top-ups—going beyond simple insulation measures to ensure long-term impact.

The spokesperson continued: “If we’re serious about reducing child poverty, pressure on the NHS, and energy insecurity, this Plan must be more than just insulation. It must be about giving people back control, comfort and dignity in their homes.”

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