Plugging the Gap: The case for national social tariffs in energy and water

In January 2026, we surveyed our debt advice clients to understand their experiences of falling behind on energy and water bills, alongside analysing client data, conducting debt advisor focus groups and commissioning nationally representative polling. We set out to answer three core questions:

1. Who is behind on bills, and by how much?
2. Why are they behind?
3. How do we prevent this in the future?

1. Energy arrears are the most common form of priority debt that StepChange clients in Britain face – and average debt levels are growing worryingly year on year.ⁱ

2. Households in England and Wales are struggling to stay on top of the water bills, with the average amount of water arrears per individual StepChange client deepening year on year.ⁱⁱ

3. While debt can and does happen to anyone, certain groups are disproportionately bearing the brunt of energy and water affordability challenges – including women, single parents and disabled people.

4. Struggling to afford household utility bills leads to coping mechanisms – such as reducing the number of showers or baths taken, putting off turning on the heating, or going without meals to avoid cooking – which can degrade people’s health, happiness and sense of self-worth.

Among adults in Britain who’d personally taken action to reduce spending on their water bills in the last three months:

Among adults on a water meter in England and Wales who’d personally taken action to reduce spending on their water bills in the last three months:

5. Current support with energy and water costs isn’t cutting through in a meaningful way.

• The Warm Home Discount scheme payment – introduced in 2011 as a single £120 sum paid in the winter intended to help those living in fuel poverty with their energy costs – has only increased by £30 over its lifetime, and by a minimal £10 since winter 2014/15. It goes without saying that increases in energy costs have far outstripped these changes.
• Limited awareness of voluntary water social tariffs is a blocker to ensuring eligible households receive the financial support they have a right to – with just three in ten (29%) adults in England and Wales aware of them – while individual providers’ offerings vary when it comes to both eligibility criteria and support amounts.

Central and devolved Governments should urgently work together to introduce national energy and water social tariffs, to protect financially vulnerable consumers from unaffordable utility costs once and for all by:

1. Transforming the existing Warm Home Discount Scheme into a social tariff.
2. Introducing a single national social tariff across all water providers in England and Wales.

The five principles below should guide the design of both energy and water social tariffs. Support to plug the affordability gap must be:

• Effectively targeted, to make sure it reaches the right people.
• Provided automatically wherever possible, to guarantee high uptake.
• Tiered, to reduce the potential for steep cliff edges in eligibility.
• Enhanced, to tangibly ease low-income households’ bill burden.
• Mandatory for all providers, to prevent a postcode lottery of support.

Speak up on social media about why national social tariffs are urgently needed in the energy and water sectors.

Email us to discuss our ‘Plug the Gap’ campaign at policy@stepchange.org