Energy bills in Great Britain are high right now for two main structural reasons:
- our continued exposure to volatile global gas markets, and,
- the way certain policy costs are currently recovered through electricity bills.
Energy suppliers offer a wide range of additional support measures to help customers, often going beyond regulatory requirements to identify and assist those who are vulnerable.
The first factor: global gas prices and our continued reliance on fossil fuels
We still rely on gas for a significant share of our electricity generation – around a quarter but up to 60% depending on the day. That matters because as a traded global commodity, gas prices are set internationally and can change very quickly in response to events elsewhere in the world.
Since the start of the Iran conflict, gas prices have fluctuated significantly, spiking by around 20% from one day to another. These global shocks feed directly into the amount households ultimately see on their bills.
Research from the UK Energy Research Centre shows that around two-thirds of the increase in energy bills between 2021 and 2025 has been driven by wholesale gas spikes caused by international events. While other elements of the bill have also risen, it is this exposure to volatile fossil fuel markets that has had the most significant impact.
The second factor: policy costs placed on energy bills
There are also costs on bills that are the result of deliberate policy choices by successive governments. These fund important priorities such as upgrading the electricity grid, supporting new electricity generation and helping households who need additional support.
Not every country places these costs on energy bills in the same way. Many governments recognise it’s fairer to fund strategic national infrastructure and support for vulnerable people through general taxation. Some countries, including France and Germany, have recently reduced policy costs in response to global price pressures. The UK Government has already taken steps in this direction, including measures announced in the Autumn Budget, but more could be explored.
What is the sector doing about high energy bills?
Energy bills are too high, and millions of people are struggling to pay. Since prices began to spike in early 2022 following Russia’s invasion of Ukraine, the number of household accounts in debt has risen, as has the average amount owed. In the part of the sector that sells energy to households (domestic retail), total energy debt including arrears owed is likely to hit £7 billion by the end of the year.
Financial support for customers in debt
Suppliers provide a wide range of support measures to help customers manage debt and arrears, including:
- structured repayment plans tailored to affordability
- payment holidays
- debt write-off schemes in specific circumstances
- access to charitable funding and hardship support
Some suppliers operate dedicated energy trusts, and organisations such as the British Gas Energy Trust provide support to customers regardless of supplier.
Wider support beyond energy bills
Support is increasingly going beyond direct financial assistance, recognising that longer-term affordability is also about helping people stay in control of their energy use and finding ways to reduce costs over time.
Suppliers have a range of additional, practical support in place, including:
- energy-efficient appliances for vulnerable households
- free electric blankets for customers most at risk
- training for customer service teams to provide more tailored, empathetic support during often difficult conversations; some have in-house social workers
- partnerships with charities such as Age UK, Mencap and Macmillan Cancer Support to ensure customers get support tailored for their specific circumstances
Investing in good customer service
Energy affordability is often linked to wider health, income, and social vulnerability factors and energy suppliers have invested in specialist teams to handle more complex and emotional situations. Despite significant pressures, customer satisfaction has improved. Recent surveys show that overall satisfaction has reached around 81%, the highest level on record in Ofgem’s latest data, while dissatisfaction has fallen to around 6%.
Service satisfaction has also improved since 2020, rising from 71% to 74%, even as call volumes and case complexity have increased significantly.
Serious about supporting customers with vulnerabilities
Energy suppliers will continue to do all they can to support customers, especially during periods of high energy bills. Even outside of price spikes, suppliers are exceeding their obligations in supporting vulnerable customers.
Energy UK’s Vulnerability Commitment is a commitment to go above and beyond existing regulation to identify and support vulnerable customers. Thirteen suppliers – between them covering 97% of the retail market – have signed up, but their involvement reaches far past a signature.
They have committed to:
- appoint a dedicated vulnerability champion
- report annually on progress
- attend independent panel sessions to evidence their actions.
This is intended to embed accountability and continuous improvement, rather than one-off initiatives.
There are some innovative examples of how companies are investing in AI that helps them identify where someone might need extra help – whether that’s spotting patterns in electricity usage that points to potential self-rationing, or using publicly available data to identify low-income homes that may need financial support.
But while it’s vital that immediate support is provided, the best way to support customers will be to bring down the cost of electricity and untangle its price from international events.
How to bring down the cost of electricity
As outlined above, the two main drivers of the high cost of electricity in this country are our reliance on gas, the price of which is affected by international events, and the placing of many additional costs onto energy bills.
Gas sets the electricity price in Great Britain due to a system called marginal pricing. The energy system operator needs to generate enough supply to meet demand, so it starts with the cheapest sources, usually renewables like wind and solar, and then continues to call on other technologies until it has enough to meet demand. The last technology used to generate electricity is called the ‘marginal plant’, and it sets the price that everyone pays for it.
Because gas is traded internationally, the price we pay fluctuates heavily, depending on what is happening globally.
In Great Britain, gas sets the price of electricity most of the time, and it generates around a quarter of our supply. As we build more clean sources of power, gas will set the price less, and slowly our prices will de-link. The progress made in renewable is already saving our country money, compared to what we’d be paying had they not been built. Analysis from Carbon Brief showed that since the start of the Iran conflict, wind and solar have helped Great Britain avoid the need for gas imports worth £1.7 billion. In 2025, the Energy and Climate Intelligence Unit has shown that wind power brought down the wholesale cost of electricity by nearly a third. And as we move to electric heating and transport – and increase the number of users on the electricity system – the cost of electricity will come down for everyone.
But to address the second driver above, further action is needed. Thanks to those policy costs, electricity is currently 4.3 times more expensive than gas per unit (this is known as the ‘Spark Gap’). These policy costs are important – they pay for vital infrastructure upgrades, the scale-up of new technologies, and support for low-income households – but they don’t need to be put onto electricity bills. If we want people to move to the electric technologies that will improve our energy security and bring down the system cost for everyone, the Government could remove more policy costs from electricity bills.
The Government also has an important role to play in ensuring that investors feel confident to invest in Great Britain. Some companies are investing millions of pounds every day to build new sources of generation, clean heat and storage, or improve the flexibility of our grid. Stable policies will help lower the cost of this investment; if long-term directions seem at risk, the cost of financing will increase.
We have twice seen first-hand the impact of a fossil fuel price shock in the last five years. In 2022, the Government spent £40 billion on support for homes, a figure that could have been lower had it been able to target that support better. With the conflict in Iran, we once again face the prospect of higher bills driven by international events. The Climate Change Committee has shown that the cost of one single fossil fuel shock is more than the total cost of achieving Net Zero.
But that is not the sector’s ultimate goal. The industry is working to build the most secure grid, in the cheapest way possible. Reducing our reliance on gas, not only for power but also for heating, will reduce our exposure to these huge price swings. We will still need some gas on the generation system for some years to come. But as we increase flexibility, electrify heat and transport, and modernise our system, gas will influence the price less and costs will come down.
In the meantime, companies across the sector remain focused on supporting the growing number of customers who need some extra help.