Efforts to deliver a new social tariff for energy bills should start now to help vulnerable families this winter 18 March 2026 Smart thinking on a new social tariff, rather than rushing to repeat wasteful and costly universal support, is needed if the Government is to deliver targeted support for families struggling with high energy bills this winter, according to new research published today (Wednesday) by the Resolution Foundation. While recent political attention has focused on support with petrol prices, the report Power Struggle says the Government should instead prioritise action on energy bills as they risk causing far more hardship. It notes that petrol prices are still lower today than before the pandemic and action on fuel duty wouldn’t do enough to help poorer families struggling with the cost of living. Middle-income families spend almost twice as much on domestic energy as they do on transport fuel, and the poorest tenth of families spend almost four times as much. The report examines various options for providing support with energy bills, including continuing the Government’s recent policy of removing policy costs from bills, providing lump-sum cash payments, boosts to Universal Credit and a new social tariff. It then assesses how each scheme fares in terms of targeting support at vulnerable families with low incomes and high energy usage. The report sets out three key principles for designing an effective new energy support scheme. These are: Do not rush a policy response.While the spot price of gas has increased by three-fifths since the war began, prompting calls for immediate action, it will take time for these increases to hit customers. First, the Energy Price Cap won’t rise until 1 July. Second, gas use is low in the summer months, with households typically using just 6 per cent of their annual consumption between July and September. Third, four-in-ten customers are currently on fixed-price deals that protect them from price rises. Repeating the blanket policies of the past would wasteful or risk leaving vulnerable families behind. The analysis shows that removing the remaining £3.7 billion of direct policy costs from everyone’s bills would deliver a slightly higher cash benefit to richer families (£150) than poorer families (£120) given higher energy use. This would also provide unnecessary support to those already protected by a fixed tariff. Spending the same amount on a UC boost of £8.60 a week (£13.50 for couples) would be more progressive but would give no extra help to households just outside the benefit system struggling with particularly high energy needs. New smart policy tools are needed to target those with low incomes and high energy usage. The Government should also avoid repeating the blank cheque written by Liz Truss’s Energy Price Guarantee, particularly given the stretched nature of the public finances. Instead, it should use the coming months to create the infrastructure for targeting families facing the greatest hardship – those with low incomes and high energy needs. The best way to achieve this targeting would be through a social tariff scheme that provides a discounted price for lower-income families. As this will require sharing of data between government and energy companies, work to ensure a scheme is up and running by winter should be accelerated now. Resolution Foundation modelling of a £3.7 billion package would provide average support of £310 for the poorest tenth of households, rising to £520 for a family with high energy needs. Ruth Curtice, Chief Executive of the Resolution Foundation, said: “The Middle East conflict has brought domestic cost of living concerns to the fore again. These pressures will be most acute with energy bills, where support should be prioritised. “But with rising gas prices today only likely to hit home this winter, the Government must resist pressure to rush out updated versions of old support schemes like the universal blank cheque approach of Liz Truss. Instead, it should think smartly about how new support can target vulnerable families with lower incomes and high energy needs. “The best way to do this is with a discounted price for lower-income families. The Government should start designing a scheme with energy companies now, so that it is operational in time for when temperatures start to drop.”
