Fuel poverty in October 2026

We have carried out a series of analyses of fuel poverty over recent years, and also explored the potential impact of social tariffs. Since then, fuel prices have fallen, but they are still above pre-crisis levels; they increased in the first two quarters of 2026, and with the Iranian and Ukraine wars, are expected to increase again. Indeed, the price cap is predicted to increase by about 16 per cent from January 2027. At the same time, all mitigations have ended, and the winter fuel allowance for pensioners is no longer universal. The government has slightly mitigated the fuel price increase by cutting VAT on electricity bills from October 2026.

This paper presents an analysis of who will be affected by fuel poverty in October 2026, based on analysis of the ONS Living Costs and Food Survey 2024/25. We use a threshold of households spending more than 10 and 20 per cent of their net income after housing costs on fuel. The analysis describes their characteristics, fuel poverty rates, and fuel poverty gaps.

We find that although there is a clear association between fuel poverty and net income, with fuel poverty concentrated in the lower-income deciles, some richer households also spend more than 20 per cent of their income on fuel, and almost 15 per cent of households in fuel poverty are not income poor. Couples without children and pensioner couple households are less likely than average to be fuel poor, and couples with two or more children and lone parent households are more likely to be fuel poor. Multivariate analysis suggests that low income is the main driver of fuel poverty.