A targeted social tariff offering discounted energy bills could lift more than one million families out of fuel poverty, according to new research. The Green Alliance report for energy firm OVO Energy found that such schemes would be more effective than current government support programmes.
Nine million households in England currently spend more than 10% of their income after housing costs on energy bills - a figure higher than during the height of the energy crisis. These families need an extra £407 annually to escape fuel poverty, representing a 62% increase since 2020.
Multiple tariff scenarios
The report models three different approaches to social tariffs. A scheme matching the current £2.25 billion cost of existing Warm Home Discount and Winter Fuel Payment programmes could reduce fuel poverty by 12% of households.
A broader, tiered structure could cut fuel poverty by 19%, rising to 26% if combined with improved energy efficiency standards in rented homes. The most targeted approach - designed to fully close the fuel poverty gap for the two lowest income groups - could reduce fuel poverty by 42%.
Industry commitment and support
OVO Energy supports targeting households with unavoidable higher energy demands, including those with disabilities, elderly residents, or high occupancy homes. The company has announced a £56 million winter support package, representing its largest ever customer assistance commitment.
Chief executive David Buttress said: "Families cannot keep living on a knife edge, worrying how they will afford their bills each winter. With gas prices still volatile, this crisis will not fix itself."
Public backing for change
A survey of 1,014 UK adults found 67% support introducing a social tariff for energy bills. Consumer champion Martin Lewis has been advocating for targeted support, with 70% of respondents to his social media poll preferring standing charge reductions over VAT cuts on energy bills.
Shaun Spiers, executive director of Green Alliance, said: "Everyone has a right to a warm home in winter yet nine million households in England are still struggling to afford their energy bills following the fossil fuel price shock."
Government pressure mounts
The research highlights limitations of current support schemes, particularly the Warm Home Discount which primarily targets households receiving means-tested benefits. OVO argues more support is needed for lower-income families who struggle with bills but don't qualify for benefits.
The findings come amid speculation about potential energy bill changes in the upcoming Budget, with industry and consumer groups calling for coordinated government and private sector action to address the deepening crisis.
Sources used: "The Northern Echo", "Bristol Post", "Daily Star" Note: This article has been edited with the help of Artificial Intelligence.
