The Rt Hon John Healey MP
Chancellor of the Exchequer
HM Treasury
1 Horse Guards Road
London SW1A 2HQ
8th October 2026
Dear Chancellor of the Exchequer,
Rising energy bills and the impact on consumers
In advance of your budget, I am writing to express Consumer Scotland’s concern about the continued pressure that rising energy costs are placing on households across Scotland and Great Britain. Targeted support may be needed to address this, alongside action to address the fast-growing problem of energy debt.
Wholesale energy prices are lower than at the peak of the last energy crisis, but households continue to face bills that are substantially higher than before Russia invaded Ukraine.
Many households are already struggling to afford the energy they need. Our latest annual energy affordability survey shows 38% of households in Scotland cannot afford to heat their home to a comfortable level, 16% find it difficult to keep up with their energy bills, and 19% are in debt and arrears. That research was carried out prior to the start of the conflict in the Middle East. Since then, the price cap has risen by 17% and according to the latest forecast from Cornwall Insight the typical household energy bill will rise to approximately £2,000 in January. This is bad news for consumers at a time when their finances are facing pressure on multiple fronts, including housing costs, food prices and other essential expenditure.
Against this backdrop, it should be an urgent priority for government to identify ways to provide targeted financial support to those households that need it most this winter. Special attention should be given to those households with additional support needs that mean their consumption is higher than typical usage – Consumer Scotland has engaged with colleagues in the Department for Energy Security and Net Zero to suggest ways to do this. And heat network and park home customers can be particularly exposed to rising energy prices as neither of these groups are protected by a price cap.
In addition to these groups, an estimated 170,000 Scottish households rely on heating oil or LPG to heat their homes. The government have already made funding available to support these consumers and, in the context of current price forecasts and higher winter demand, further support may be required.
We appreciate that in the time available before this winter, the suite of options open to government is likely to be limited. This is largely because the data to accurately identify those households that are most in need either doesn’t exist or cannot yet be effectively linked with energy industry-held data. Any support required in the short term is therefore likely to be linked to the Warm Home Discount, though there could be opportunities to go further by providing additional support to households with specific needs. For example, in Scotland we are working with the Scottish government to provide extra support to the terminally ill and exploring further support for households that have higher-than-typical energy usage due to medical needs.
In the longer term, work across the UK and Scottish governments and Ofgem is needed to improve the quality of energy affordability supports, and to tackle the large and growing problem of energy debt and arrears.
The main current energy bill support, the Warm Home Discount, is flawed. It is cliff-edge in its eligibility, not tiered to reflect different levels of consumer need or higher essential energy use, and it is not indexed to energy prices. Therefore, although the overall funding is significant, the support is not always targeted at the right households, nor is it proportionate. Intensive work is needed to ensure government and industry-held data is used so that appropriate levels of support reach those who need it.
In parallel, concerted action is required to tackle the problem of energy debt. The cumulative impact of high prices in recent years means that total household energy debt is now £4.7bn, roughly four times what it was prior to the last energy crisis. This is a problem not just for indebted households, but for all consumers, as suppliers’ costs are ultimately passed through to all consumers via the price cap. On average over £50 of a household’s annual energy bill now relates to debt, and this is likely to rise in the coming months as prices increase. This is unsustainable. As an interim step we would like the government to approve Ofgem’s Debt Relief Scheme to provide targeted relief for some households. In addition, steps need to be taken to ensure that households that are in debt receive the advice they need, are put on credible repayment plans, and a wider preventive framework is put in place to ensure households stay out of debt.
We recognise the significant fiscal pressures facing government. However, if prices continue to rise, many households will face impossible choices this winter and it is incumbent on the government to prepare for different scenarios around energy costs. This means developing credible options to provide support on a targeted basis to households that are most under pressure, in the event that this is needed, which on current trends looks increasingly likely.
We would welcome the opportunity to discuss these issues further and to contribute evidence from Consumer Scotland's research and engagement with consumers.
Yours sincerely,
Sam Ghibaldan
Chief Executive