The energy industry is urging the government to introduce more substantial financial assistance for struggling households as bills are set to reach their highest level in three years, according to the body representing UK energy suppliers.
Energy UK has warned that persistently elevated prices over recent years have pushed some households into a position where they require what it describes as "emergency support" beyond the current £150 Warm Home Discount scheme. The organisation contends that bills have become unaffordable for millions of people and that a "better targeted and more agile" approach to support is essential.
Ofgem, the energy regulator, is scheduled to announce the price cap for the period from 1 October to 31 December 2026 by 26 August 2026. According to Cornwall Insight forecasts, the cap will rise to £1,729 per year for a typical dual-fuel household, representing an increase of £66 from the current level of £1,663.
Dhara Vyas, chief executive of Energy UK, stated that
suppliers continue to do all they can to help their customers but as well as persistently high bills, record levels of debt show how the current system is failing to provide the right support to those in need. She added that a new "social discount" scheme would create
a system that works better for everyone.
What is driving the price increases?
Multiple factors are contributing to the rise in energy costs. At the end of the previous winter, Ofgem reported that customers who had fallen behind on their energy bills owed suppliers a record £4.7bn. Since that time, wholesale energy prices have climbed following geopolitical tensions in the Middle East. Additionally, heatwaves across Europe have increased demand for power generation to support air conditioning and other cooling systems, further pushing up prices.
The anticipated price rise is expected to outweigh the benefit of the government's decision to remove VAT on household electricity bills from October onwards.
How does the current support system work?
Under the existing arrangement, people receiving means-tested benefits are entitled to a one-off £150 Warm Home Discount during the winter months. This rebate is administered by energy suppliers themselves and is funded through a levy on all energy users that is collected and redistributed via bills. According to government guidance, eligible households must be named on their electricity bill by 23 August 2026 to receive the discount automatically this winter.
Energy UK reports that the Warm Home Discount reaches six million customers. However, the organisation identifies another 2.5 million people who require assistance because a medical condition or poorly insulated home means they consume more energy than average.
What is Energy UK proposing?
Energy UK has put forward a proposal for a new support framework that would allow the government to combine information about customers' income, health, and energy consumption. Such a system could deliver targeted and adjustable support that responds to changing needs and price levels.
The body estimates its proposed new scheme would cost £1.9bn—nearly double the expense of the current system—but could offer £450 in support to some households. Energy UK suggests the scheme could continue to be part-funded through bills or could be shifted entirely onto the taxpayer via government funding.
Adam Scorer, chief executive of National Energy Action, endorsed this approach, noting that
we desperately need a new approach. He highlighted that the Warm Home Discount has increased by only £10 over the last decade and stressed that
there will be a lot of detail to get right, but if government genuinely wants to provide breathing space for people in fuel poverty, it needs to take this challenge on and work with energy companies and charities to design something truly fit for purpose.
What is the historical context?
The last time the price cap reached a comparable level was in July 2023, according to Cornwall Insight, though this was still below the peaks experienced the previous year in the aftermath of Russia's invasion of Ukraine. During that earlier energy price crisis, the Conservative government committed approximately £40bn in total government spending to support households with energy bills.
The government announced in the Autumn Budget that it would provide an average of £150 off energy bills from April 2026, on top of the Warm Home Discount scheme. Beyond this, government guidance indicates that people on benefits or low income may also qualify for help through energy-saving improvements, local council support, cold weather payments, or winter heating payments depending on where they live.
What challenges lie ahead?
The proposal to combine sources of personal data—including income and health information—alongside the need to identify additional taxpayer funding for an expanded scheme are likely to raise significant questions about implementation and privacy. Nevertheless, Energy UK and allied organisations argue that the current system is inadequate and that a more comprehensive approach is necessary to address the scale of the problem.
What happens next?
Ofgem's announcement of the October-to-December 2026 price cap is due by 26 August 2026. The deadline for households to be named on their electricity bill to receive the £150 Warm Home Discount automatically is 23 August 2026. These dates represent critical milestones for both the energy industry's push for policy change and for eligible households seeking to secure available support.
Key Facts:
- Energy UK is calling for an expanded support scheme costing £1.9bn annually, compared to the current £150 Warm Home Discount
- The price cap is forecast to reach £1,729 per year for a typical dual-fuel household from October 2026
- A record £4.7bn in unpaid energy bills was owed to suppliers at the end of the previous winter
- The proposed new scheme could offer up to £450 in support to eligible households
- Households must be named on their electricity bill by 23 August 2026 to receive the automatic Warm Home Discount this winter
