Tackling fuel poverty: priority actions update

Since the Tackling Fuel Poverty Plan was published in 2021, we have seen a dramatic increase in the cost of energy. This has had an impact on households across Wales, regardless of income levels. But, of course, it has hit those households who are least able to pay the most, pushing more families into fuel poverty.

Although energy prices have reduced from the record high levels of 2022/23, their impact is still felt widely. It is against this backdrop we have undertaken a review of our Tackling Fuel Poverty Plan.  

Our review reports on progress against the ten short term actions in the Tackling Fuel Poverty Plan. Following the review, we have been able to close two of the original actions contained in the plan. We are extending the remaining actions and will review progress on these in two year’s time. As circumstances have evolved since the plan was launched, we have introduced eight new actions which we will monitor over the coming years.

To support our progress, we are developing updated estimates of fuel poverty, which we anticipate publishing in the autumn. We will use these estimates to develop meaningful interim targets based on EPC ratings. My officials will seek input from the Fuel Poverty Advisory Panel ahead of finalising these interim targets. We will publish the revised fuel poverty estimates in the autumn

Tackling fuel poverty remains a key commitment of this Government and we are using all the levers Welsh Government has at its disposal to reduce levels of fuel poverty and support those experiencing it.  

Since the Tackling Fuel Poverty Plan was published in 2021, we have launched our new Warm Homes Nest scheme. The scheme is our primary mechanism to tackle fuel poverty, to reduce the number of low-income households living in cold, damp homes. Eligible households receive a bespoke package of measures to insulate and decarbonise their home, leading to lower energy bills, moving them out of fuel poverty.

I am proud of the Welsh Government’s continued commitment to tackling fuel poverty and supporting families experiencing it. With energy costs remaining significantly higher than they were pre-crisis, it is important we work collaboratively on this important issue. Through our comprehensive, partnership approach, we are enhancing household incomes, increasing home energy efficiency, and working closely with key partners develop a lasting solution to fuel poverty. I look forward to that partnership approach continuing as we move forward with the next phase of our Tackling Fuel Poverty Plan.

Jane Hutt MS 

Cabinet Secretary for Social Justice, Trefnydd and Chief Whip 

The Tackling Fuel Poverty Plan (2021 to 2035) was published in March 2021. 

The Plan set targets for tackling fuel poverty together with ten short term actions, to be delivered by the Welsh Government in partnership with key stakeholders.

Welsh Government has undertaken a review of the actions and has updated the plan accordingly. Following this review, we have closed two of the original actions and commitments, developed and extended eight actions, which are ongoing, and added six new, short-term actions. 

The plan is split into three sections; completed actions, ongoing actions and new actions as detailed below. 

Consult on and implement revised arrangements for delivering measures for tackling fuel poverty beyond March 2023. 

Based on the outcome of the Home Energy Efficiency consultation, publish the Welsh Government’s response to the consultation and implement our findings to start in April 2023.

Policy goals: Prioritise and protect, decarbonise.

Update

Welsh Government published the consultation outcome report on 14 June 2023 along with a policy statement and lessons learnt document. The consultation process helped shape the policy design for the new Warm Homes Programme.

Welsh Government invited tenders for the new Warm Homes Programme demand-led scheme (the Warm Homes Nest scheme) for implementation from April 2024.

The then Minister for Climate Change ensured continued support for households through the winter of 2023/24 and an orderly transition between schemes by extending the Nest contract to the end of March 2024. 

We launched our new Warm Homes Nest scheme on 1 April 2024. 

Improve home energy efficiency advice and support services.  

Policy goals: Identify, prioritise and protect, decarbonise.

Update

Welsh Government recognises householders require good quality and trusted advice to undertake their decarbonisation journey and to save money. It remains committed to offering free impartial bilingual energy savings advice to all householders in Wales.

The outcome from an Energy Services Advice Pilot was received in May 2022. While there were benefits of the pilot, it was felt a different balance of costs and benefits was needed. This evidence informed the new Warm Homes Nest scheme.

The Nest website and helpline offers energy efficiency advice and links to our Climate Action Wales website. It also signposts people to wider services and schemes offered by the Welsh and UK Governments that could help with the cost of living.

We launched our new Warm Homes Nest scheme on 1 April 2024. To maintain confidence, it is important that the advice afforded under the scheme is independent from any installer businesses working on the scheme. Consequently, we have strengthened this independence by separating out the advice service contract from the delivery contract.

Based on the outcome of the Domestic Energy Advice and Support Services consultation, we will publish the Welsh Government’s response to the consultation and implement our findings to start in April 2023.

Priority goals: Identify, prioritise and protect, decarbonise.

Update

Welsh Government published its response to the consultation on 14 June 2023, along with a policy statement and a lessons learnt document. Responses to the consultation informed the policy for the new Warm Homes Programme.  

A procurement exercise for delivery of the next iteration of the Warm Homes demand-led scheme was undertaken and the new scheme launched on 1 April 2024.

Continue to invest and deliver home energy efficiency improvements to support households in fuel poverty or at risk of living in fuel poverty, including through the Warm Homes Programme.

Priority goals: Identify, prioritise and protect, decarbonise.

Update

2021 to 2022 

• Total Investment in Nest: £24.5 million
• Total number of homes improved: 5,127
• Free energy savings advice: 15,777 households
• Modelled Average bill saving: £300 per year

2022 to 2023

• Total Investment in Nest: £26.9 million
• Total number of homes improved: 4,364
• Free energy savings advice: 21,959 households
• Modelled Average bill saving: £422 per year

2023 to 2024

• Total Investment in Nest: £39.3 million
• Total number of homes improved: 4,816
• Free energy savings advice: 12,809 households
• Modelled Average bill saving: £595 per year

2024 to 2025

• We launched our new Warm Homes Nest scheme on 1 April 2024. Full details of the new scheme delivery will be published in the Warm Homes Nest scheme 2024-25 annual report.

2025 to 2026 

• The Warm Homes Nest scheme has been given a 7% allocation uplift in the Welsh Government’s budget for 2025-26.
• Since 2011, Welsh Government has invested more than £251 million to improve home energy efficiency through the Warm Homes Nest scheme. Nest has helped more than 82,000 lower income households by installing measures in their homes. More than 210,800 have contacted Nest to receive free energy efficiency advice.
• Full details of the scheme are provided within our annual reports.
• Warm Homes Nest is a seven year scheme. We will continue to look for opportunities to support more households through the continuous development and improvement of the scheme and the wider programme. 

Prepare, publish and keep under review a plan to improve winter resilience for people struggling to meet the cost of their domestic fuel needs and at risk of avoidable ill health or premature death from living in a cold home.

Priority goals: Identify, prioritise and protect, decarbonise.

Update

The Cold Weather Resilience Plan was published on Fuel Poverty Awareness Day – December 2021.

An action tracker was set up to monitor progress. This tracker is shared with the Fuel Poverty Advisory Panel, FPAP, which has a role in monitoring progress and holding the Government to account for progress.

We will work with the FPAP to review the Cold Weather Resilience Plan ahead of next winter.   

Administrative advisory board on fuel poverty to monitor and review progress on action to tackle fuel poverty in Wales. (CCERA Recommendation 4).

Priority goals: Identify, prioritise and protect, influence.

Update

The FPAP held its first meeting in June 2021 and has continued to meet on a quarterly basis.

Prepare and publish Welsh domestic energy data annually to help us and partners focus on communities at greatest risk of living in fuel poverty. (CCERA Recommendation 8).

Priority goals: Identify, prioritise and protect, influence.

Update

The Fuel Poverty interactive dashboard was published in June 2023.

This will be updated as and when suitable data becomes available. 

An energy efficiency of homes dashboard has also been published: Energy Performance Certificates (EPCs) for homes in Wales.

This will be updated as appropriate.

Publish a biennial review of performance towards our 2035 objectives, which shall include the publication of fuel poverty estimates for Wales. (CCERA Recommendation 4).

Priority goals: Identify, prioritise and protect, influence.

Update

The statistical article, Fuel poverty modelled estimates for Wales as at October 2021, was published on 2 November 2022.

The figures released in that publication provided more detailed analysis on the statistical article published in April 2022, which provided high-level modelled estimates of fuel poverty as at October 2021.

The figures are an estimate of fuel poverty for October 2021, when the price cap was £1,277.

Although this report does not take account of subsequent energy price cap increases during 2022, it does help us understand more about those who were already in fuel poverty before the increase and will enable us to ensure we are focusing the support to the households and dwellings most affected.

We are developing updated estimates of fuel poverty relating to October 2024. The fuel poverty estimates will be determined using the three drivers of fuel poverty: energy efficiency of the home, the income of the household and the fuel costs of the household. The indicators will estimate the number of households in fuel poverty, those in severe fuel poverty and those at risk of fuel poverty. We will produce the estimates at a local authority level where possible.

We anticipate updated fuel poverty estimates will be published early in the autumn.

Encourage the UK Government, Regulator and energy suppliers to reduce the overreliance on the installation of prepayment meters as a method of recovering arrears, which results in self-rationing and self-disconnection.

Priority goals: Identify, prioritise and protect, influence.

Update

The then Minister for Social Justice and Chief Whip wrote to the Chief Executives of energy suppliers in November 2022, raising concerns that as more households fell behind with their energy bills, they may be driven onto prepayment meters. In her letter, she called for the practice of moving households in arrears onto prepayment meters to end.

The Minister chaired several meetings with energy suppliers, met senior Ofgem officials and wrote to the then Secretary of State for Energy Security and Net Zero, highlighting her concerns the prepayment system was failing the most vulnerable people in society.

The temporary ban on the involuntary installation of prepayment meters in 2023 coupled with Ofgem’s new Code of Practice setting strict criteria around when prepayment meters can be installed, has reduced the over reliance on the installation of prepayment meters as a method of recovering arrears.

In September 2023 Ofgem confirmed that the Code of Practice for the involuntary installation of prepayment meters would be incorporated into mandatory Supply Licence Conditions, and it became part of those Supplier Licence Conditions on 8 November 2023.

Since 1 October 2023, households on prepayment meters have been paying lower standing charges than those on other payment methods, which is a welcome first step.

We welcome Ofgem’s consultation on improving debt standards in the domestic retail market. Improving both debt standards for energy consumers and the debt pathway should reduce the need for suppliers to use prepayment meters as a means of recovering arrears.

Support the implementation of the smart metering framework by 2024. (CCERA Recommendation 15)

Priority goals: Identify, prioritise and protect, influence.

Update

UK Government is responsible for the roll out of smart meters.

Smart meters are an important tool to help people with saving money and acting on climate change. 

The Climate Action Wales website contains information on actions householders can take to tackle climate change and save money. It includes a dedicated page on the essential facts about smart meters.

In meetings with energy suppliers, the then Minister for Social Justice and Chief Whip called on them to replace traditional prepayment meters with smart prepayment meters. This will enable suppliers to better monitor householders' usage and reduce the number of householders self-disconnecting because they cannot afford top ups.

The Cabinet Secretary for Culture and Social Justice wrote to Ofgem on 1 May 2024 to outline her priorities and highlight her interest in ensuring the rules are implemented effectively and consumers are appropriately protected.

We will continue to monitor the situation and work with UK Government and other key stakeholders as appropriate. 

Support the development and implementation of the Energy Company Obligation scheme and other UK Government initiatives in relation to Wales. (CCERA Recommendation 14).

Priority goals: Influence, decarbonise.

Update

Welsh Government recognises the benefits the GB-wide Energy Company Obligation (ECO) scheme can bring to Wales. We have provided support to local authorities to develop Statement of Intent on LA (local authority) ECO Flex through Local Partnerships (LP) and the Welsh Local Government Association (WLGA).  

In 2023 to 2024, we provided a total of £352,000 of funding, alongside technical assistance, to local authorities to enable them to leverage funds from ECO.

We provided a further £500,000 of funding to support local authorities in 2024 to 2025.

This has the potential to significantly increase the number of households we can support.

We have also met with WLGA and local authorities to encourage them to engage fully with ECO4 flex and ensure residents in their area are able to receive support available under the scheme.

Our free, impartial Nest advice service, plays an important role in understanding each household’s individual circumstances and supporting them to access the most appropriate scheme for their needs, including ECO and the Great British Insulation Scheme.

In February 2025, Ofgem confirmed there were over 11,600 ECO Flex submissions made by Welsh local authorities.

We will continue to work with the WLGA and support local authorities as appropriate.

Establish what the appropriate satisfactory heating regime is. The Welsh Government will commission advice to determine whether the current definition is appropriate to ensure people can be kept comfortable and safe, especially in light of some changed working patterns as a result of the pandemic.

Priority goals: Identify, prioritise and decarbonise.

Update

Public Health Wales has provided Welsh Government with a Cold Homes in Wales report that makes several recommendations, including:

• The satisfactory heating regime should advise that households heat to a temperature that is comfortable, but to avoid temperatures in commonly used living areas falling below 18°C when the home is occupied; higher minimum temperatures might be required for vulnerable groups.
• The satisfactory heating regime should specify that dwellings are heated as needed when occupied.
• The satisfactory heating regime should signpost to trusted, accessible and inclusive sources of information and advice on affordable warmth and keeping safe at home.

We will take account of these recommendations in our response to fuel poverty and cold weather resilience, including in any future review of our Cold Weather Resilience Plan.

Deliver the new Warm Homes Programme and work to develop an area-based element to the scheme. 

Priority goals: Identify, prioritise and protect, decarbonise.

Update

We launched our new Warm Homes Nest scheme on 1 April 2024.

With the new scheme in its infancy, officials have reviewed progress to ensure the demand-led element of the programme meets its primary objectives in tackling fuel poverty and the climate emergency. The Cabinet Secretary for Housing and Local Government has agreed to allow one-off boiler repairs or replacements to address all householders eligible for Nest in immediate crisis who are without heating or hot water. This crisis route, which currently runs until March 2026, will be promoted widely and will be reviewed annually.

We will produce annual progress reports on the new scheme and we are developing a monitoring and evaluation framework to track its effectiveness.

We are working to develop and deliver an area-based approach to tackle fuel poverty within the Warm Homes Programme.

We will look to develop an integrated approach across all tenures and income levels to drive decarbonisation and reduce fuel poverty.

Provide Welsh Government financial support for vulnerable households.

Priority goals: Identify, prioritise and protect.  

Update

The Cabinet Secretary for Social Justice, Trefnydd and Chief Whip published a written statement on Tackling Fuel Poverty on 27 January 2025, detailing how our efforts to get more money into peoples’ pockets is tackling fuel poverty.

Our top priorities are maximising income and building financial resilience. We remain committed to ensuring that people in Wales claim every pound they are entitled to.

The Welsh Government’s new Child Poverty Strategy sets out our commitment to improving outcomes for low income households in Wales and tackling poverty and inequality in the longer term. This includes action to reduce costs and maximise the incomes of vulnerable households.

Our strong benefit take-up campaign is delivering results in Wales.

Claim What’s Yours

Our latest media burst for our Claim What’s Yours national benefits take-up campaign commenced in January 2025 and will run through to 31 March 2025 with accessible awareness raising messages being delivered through all media channels including TV and radio. The main Call to Action signposts people towards Advicelink Cymru and encourages them to check their eligibility for further financial support. We, alongside our authority partners, are actively helping our citizens claim more of what is theirs. 

Up until March 2024, the claim What’s Yours advisors have helped over 80,600 people claim over £29.1 million in additional income.

Single Advice Fund

The Single Advice Fund is also playing a key part in ensuring people in Wales receive the financial support they are entitled to.

Between January 2020 and December 2024, the Single Advice Fund has supported over 361,000 people from our most disadvantaged and marginalised communities, helping them secure over £170 million in additional income and write off £49.1 million in debt.

Warm Hubs

Our £1.5 million funding in 2024 to 2025 for Warm Hubs has provided warm and safe spaces in the community building on previous investment and our continued investment in 2025 to 2026 is part of our ongoing package of support including our Discretionary Assistance Fund, Single Advice Fund and Fuel Voucher Scheme. These hubs provide a fantastic opportunity for people in the local community to connect with others, stay warm and access advice and services in a friendly and supportive environment.

Fuel Bank Foundation 

Since June 2022, we have allocated more than £6.3 million to enable the Fuel Bank Foundation to introduce a national Fuel Voucher and Heat Fund scheme in Wales.

Discretionary Assistance Fund

The Discretionary Assistance Fund (DAF) provides financial support for households experiencing an unexpected financial crisis. In 2024/25 the DAF had a budget of £38.5 million, for 2025/26 this has increased to £39.5 million. Through the DAF a household can apply for a contribution towards off grid oil and gas if they are in financial crisis with no other means of support. Since November 2024, off grid fuel payments have been increased to reflect the rise in energy prices. A contribution towards a tank of off grid oil or gas of £500 or three payments towards gas cannisters of £82.50 each per 12-month rolling period.

Develop and introduce, energy efficiency based targets to address fuel poverty.

Priority goals: Identify, prioritise and protect, decarbonise.

Update

We have sought advice on the scope and potential ambition of interim targets from the FPAP.

The revised fuel poverty estimates, which we intend to publish in the autumn, will be used to develop meaningful interim targets based on EPC ratings.

Officials will seek input from the Fuel Poverty Advisory Panel ahead of finalising the targets.

Fully assess the level of investment required to decarbonise fuel poor homes and make long-term plans for delivering the funding required. (Climate Change Committee recommendation R2023-112).

Priority goals: Identify, prioritise and protect, decarbonise.

Update

We are promoting a just transition by supporting fuel poor households with the decarbonisation of their homes, primarily through the adoption of energy efficiency measures and low carbon heating systems. We are assessing the practical actions required to make more widespread change and their associated costs through the development of our decarbonisation pathway and policies for the residential sector for Carbon Budget 3 (2026-2030) and our energy efficiency based interim targets.

Monitor the installation of prepayment meters following changes to energy suppliers Licence Conditions. 

Priority goals: Influence and protect.

Update

Welsh Government welcomes the new rules Ofgem put in place around installing prepayment meters which now form part of suppliers’ licencing conditions. We are monitoring the situation closely to ensure the rules are working and eligible households are protected.

It is disappointing to learn several energy suppliers have been given the go ahead to recommence the forced installation of prepayment meters. These suppliers have provided evidence and assurances they have met Ofgem’s conditions to restart involuntary installations.

We will monitor the situation and engage with Ofgem and other key partners to ensure vulnerable customers are protected and do not have a prepayment meter installed against their will.  

Welsh Government will seek to collaborate and influence to protect and support vulnerable households where it does not have levers to deliver the actions directly.

Priority goals: Influence, prioritise and protect.

Update

During the peak of the energy crisis, the then Minister for Social Justice and Chief Whip met energy suppliers on several occasions and repeatedly called on them to ensure they do everything in their power to better help vulnerable households during the cost-of-living crisis.

We have called on energy suppliers, UK Government and Ofgem to ensure all debt recovery companies are accredited by the Enforcement Conduct Board.

The responsibility for developing a social tariff and other policies to deliver protections for vulnerable customers rests with the UK Government. Welsh Government has consistently called on the UK Government to introduce a social tariff to protect the most vulnerable householders. This aligns with the views of energy suppliers, charities and campaign organisations.

We are pleased that, following our calls for reform, prepayment is now the cheapest way to pay for energy.

We have also consistently called on UK Government to take action on standing charges. Standing charges are a particular injustice for households on prepayment meters. Following a period of self-disconnection, householders are charged for all the days when it was not possible to obtain a supply.  Furthermore, customers across Wales often face higher than average standing charges and Welsh Government considers this unfair. We published our response to the Ofgem Call for Input on standing Charges.

We will continue to call on the UK Government and others to go further to support and protect the most vulnerable.