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As we head into winter, households across the UK are still feeling the strain of high energy costs. Energy bills remain a major driver of the cost-of-living crisis, and many families will have to cut back on heating and everyday spending to cope. The Chancellor should use this Budget to make affordable clean energy a reality for everyone — with lower bills, warmer homes and a fairer transition that leaves no household or community behind.

The UK’s continued dependence on oil and gas leaves households exposed to volatile fossil fuel prices, with geopolitical shocks feeding through into bills. New oil and gas extraction, including the Rosebank oil field, won’t cut bills but will fuel dangerous climate change, driving more wildfires, droughts and floods. The Government must reject Rosebank and double down on the clean energy transition, investing in homegrown clean energy, strengthening energy security and ensuring that households feel the benefits in their daily lives.

© Grusho Anna / Shutterstock

Recent moves from government have shown it can act directly and promptly to cut electricity bills. Changes announced at the 2025 Autumn Budget, including moving the costs of some schemes off bills, are expected to reduce average bills by around £150.  The removal of VAT from domestic electricity bills has taken a further £45 a year off the typical bill. These steps provide welcome breathing space, but more is needed. It is possible to tackle the climate and cost-of-living crises simultaneously, providing support for households under pressure while stabilising bills by rolling out clean energy to reduce the UK’s dependence on volatile fossil fuels.

WWF’s Power to the Regions report sets out a practical package of policies designed to put pounds back in people’s pockets, tackle fuel poverty and strengthen energy security. Building on the earlier Pounds in Pockets analysis, the proposals were developed and tested with people in Greater Manchester, South Yorkshire, the North-East and the West Midlands. The research shows that well-designed climate policy can deliver benefits in every postcode, to all types of household, including those who rent, cannot afford the upfront cost of home upgrades, or do not qualify for existing support.

Five ‘affordable energy’ measures stand out from the report for this Budget

1. Finish moving legacy policy levies off electricity bills. The 2025 Autumn Budget shifted some policy costs off bills for three years. The Chancellor should complete that reform at this Budget by moving the remaining legacy policy costs into government spending over the course of this Parliament. Alongside the VAT cut, this would consolidate immediate savings of almost £150 a year for households, reduce fuel poverty, and make clean heating and transport cheaper to run.

2. Introduce a simple social energy tariff for vulnerable customers. The Chancellor should introduce an automatic discount for households most impacted by high energy costs. This could deliver average savings of around 25% off an eligible household’s energy bill (around £415 a year), providing dependable support for those most in need when prices rise and supporting a fair transition. Our modelling suggests that the tariff could lift more than 500,000 households out of fuel poverty across the four regions analysed alone.  

3. Create a renters’ energy dividend. Renters, particularly those living in blocks of flats, are often unable to install solar panels or choose how their building is powered. The Chancellor should direct and fund Great British Energy to partner with solar developers and housing providers to connect low-income rented homes to solar power priced at least 20% below the grid tariff. Households could save at least £120 a year with no upfront cost, while a relatively small public subsidy could crowd in greater private investment and create visible local clean energy projects.

4. Offer a home upgrade Stamp Duty rebate. Buying a home is a natural point at which owners consider renovations, but energy efficiency improvements can lose out to more visible projects. The Chancellor could introduce a rebate of up to £3,750 for buyers who complete eligible upgrades within five years of purchase. This would incentivise them to insulate homes, cutting bills and energy demand.  

5. Back heat-as-a-service guarantees. Heat pump subscriptions can remove the barrier of a large up-front cost, spreading installation and maintenance costs across manageable monthly payments, similar to a mobile phone contract. Financing costs currently make these offers more expensive than they need to be – the Chancellor could tackle this through a guarantee scheme to reduce risk for providers. This could cut subscription costs by around 13%, approximately £230 a year according to our modelling.

© Parkerspics / Shutterstock

Lower bills, stronger regions and greater energy security

Taken together, these measures combine immediate bill relief with practical routes for both renters and homeowners to benefit from cleaner energy. It is vital to ensure that the benefits of the transition are tangible for people regardless of income, housing situation or postcode.

The Budget is therefore an opportunity to tackle the cost-of-living and climate crises together. Moving legacy levies, establishing an automatic social tariff, incentivising home upgrades, and making it easier for renters to benefit from clean power would show that cutting bills and accelerating the clean energy transition are not competing goals. The clean energy transition isn’t just about cutting emissions - it’s about unlocking lower bills and warmer homes for people across the UK.
 

  • Trees in the Selous Game Reserve. Selous, Tanzania
    © Greg Armfield WWF

    Author

    Rick Parfett, Head of Climate Policy, WWF-UK

    India Redrup, Senior Policy Advisor, Climate, WWF-UK 

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