Price cap: bills rising again means poorly insulated homes £570 worse off

Approaching four years on from the start of the gas crisis, energy prices remain persistently high, with energy bills under the Ofgem price cap remaining about 50% above pre-energy crisis levels and are set to rise slightly in October 2025 under the newly-announced price cap [2]. The ongoing extra costs compared to before the crisis are mostly a result of continued volatility in wholesale gas markets, which drives both gas and electricity prices. 

Cost disparity is significant depending on the efficiency of a home, with those at the lowest energy efficiency ratings (EPC Band F) paying £570 more per year on dual-fuel bills compared to a home with the target EPC Band C rating. This breaks down into approximately £280 for gas for example due to poor insulation and £290 for electricity due to inefficient lighting and appliances. Around half a million homes fall into this low energy efficiency rating. 

The average UK home, rated EPC Band D – and accounting for around 10 million homes –  will see bills that are £210 higher than an EPC Band C home, with an extra £135 for gas and £75 for electricity. 

The extra energy costs for inefficient homes would have been even higher, except that energy demand since 2021 has been suppressed as households have cut back on energy use in response to higher prices. [3] 

Commenting on the analysis, Jess Ralston, Energy Analyst at the ECIU said: “It may be warm now, but with winter approaching families living in poorly insulated homes will be facing damp, cold conditions and much higher bills again as prices remain high, approaching five years into the gas crisis triggered by Putin’s invasion of Ukraine. 

“Until we shift away from gas for heating and power, we're tied to volatile international markets influenced by these foreign events. 

The government's 'Warm Homes Plan' which aims to properly insulate homes and roll out more electric heat pumps could help, powered by British renewables while gas boilers become more dependent on foreign fuel. As North Sea output continues its inevitable decline,  warm, electrified homes will give families a shield against future energy shocks. Likewise, the next renewables auction round offers a vital chance to boost our energy independence by building more UK wind and solar, rather than relying on foreign gas. 

With 12 million struggling with fuel poverty [4], all eyes are now on the details of Warm Homes Plan for a lasting solution [5]."  

Before the election, the Government committed to insulating 19 million homes through its Warm Homes Plan [6], however this has already been dropped to 5 million [7] but funding was committed in the Comprehensive Spending Review [8] with further details expected in the Autumn. 

Cold, damp homes are responsible for making people ill, for example through increased respiratory and cardiovascular diseases [9], which adds to the pressures on the NHS, with the Buildings Research Establishment estimating this costs it £1.5bn a year [10]. 
 

Notes to editors:
 

[1] ECIU analysis uses prices under Ofgem’s price cap for Q4 2025 and applies these prices to a whole year’s demand at Typical Domestic Consumption Values (TDCV) and for median demand at different EPC bands, according to the DESNZ National Energy Efficiency Database.  Analysis based on prices for Q4 is illustrative of costs for the year, on the assumption of prices not varying much in the three other price caps over the coming 12months.  

Numbers of homes at each EPC band can be estimated using various sources.  NEED tables (DESNZ, 2025) list the numbers of homes at each band by year (by electricity and gas, in England and Wales, up to 2023), but not all homes have EPCs; scaling according to the split of known bands can be used to estimate UK totals accounting for unknown EPCs.  Live tables on Energy Performance of Buildings Certificates (updated 2025) list the number of certificates issued in England and Wales, with some homes having had more than one EPC.  ONS analysis uses data from Energy Performance Certificate data on Open Data Communities and Valuation Office Agency – Property Attributes data (DLUHC, 2025), and avoids double-counting by taking only one set recent set of values.  These methods yield slightly different estimates for UK totals, but they all suggest that there are around 10 million homes at EPC D, 2–3 million at EPC E, and around 0.5 million at EPC F. 

[2] Ofgem, Price Cap Explained 

[3] Lower demand for gas and electricity since 2021 is seen at household levels in the DESNZ National Energy Efficiency Database (NEED), and at the national housing level in the DESNZ DUKES and Energy Trends 4.1 and 5.2 datasets. 

[4] https://www.endfuelpoverty.org.uk/fuel-poverty-statistics-show-12-million-households-struggling/  

[5] The Guardian, https://www.theguardian.com/politics/2025/may/27/dont-cut-132bn-warm-homes-pledge-over-winter-fuel-payments-labour-told 

[6] Labour, Warm Homes Scheme 

[7] Hansard, Warm Homes Plan  

[8] HM Government, Spending Review 2025 

[9] The Institute of Health Equity, Left Out in the Cold; The Hidden Costs of Cold Homes (2024) 

[10] End Fuel Poverty Coalition, Cold damp homes cost to NHS estimated as energy price cap rises 

For more information or for interview requests:

Jess Ralston, Head of Energy, ECIU, Tel: 07972 548 503, email: jess.ralston@eciu.net