Big increases in energy bills mean that UK households are set to face a very difficult winter. Annualised bills for a typical household are currently £1,971, already 50% higher than in March, but they are expected to increase to £3,600 in October, and even further, to £4,600, from January. The government has already provided some support, but more is likely to be needed. This paper lays out the government’s options.

Key findings:

• The government’s support package was generous, but bills are now expected to increase much further.
• The measures committed to by Liz Truss and Rishi Sunak will make only a small dent in the costs now expected this winter.
• Extending the Johnson government’s support package to account for higher energy bills would cost £23 billion.
• Capping energy bills would avoid gaps in support but would be expensive.
• Support is likely to be needed beyond this year.