Social Tariff Working Group: final report – spring 2025

2. Context and Policy Background

In the early 2000s, energy suppliers offered social tariffs which were generally priced to match the cheapest available energy tariffs and usually included support services from suppliers to help consumers lower bills further. Customers who qualified included those aged over 60, people on means-tested benefits, and those living in fuel poverty or on a low income.

The regulatory and economic landscape has changed since then. In 2011, social tariffs were replaced by the Warm Home Discount (WHD) scheme; this targets support at low income households, providing a rebate of £150 every year, and is in statute until 2026. The energy price cap on domestic bills is also now in place and calculated quarterly by Ofgem.

However, the support currently in place is not fit for purpose, and nor can the human impact of high and unaffordable energy prices be ignored. Citizens Advice Scotland (CAS) reports that it is providing energy advice to almost 20% of those using its services and that average energy debt is up 8% year on year to around £2500. This figure is even higher for people living in rural areas.

Paying for essentials like energy becomes all-consuming for many, particularly disabled people, with SCOPE reporting cases where people have to “sacrifice almost everything. [Last winter], I didn't go anywhere. I didn't eat as much. I just turned off all the lights. I didn't have a choice. [It felt] horrible.”

With energy bills remaining significantly high, reform that protects vulnerable consumers from price shocks, affordability challenges and ever increasing energy debt is needed urgently. The Scottish Government believes that a social tariff mechanism – or, more accurately, targeted bill support in the form of a discount or rebate – is the best way to ensure that energy consumers are protected against high costs and can afford all of their energy needs.