Living in rural Scotland, the findings in Changeworks' latest report are unlikely to come as a surprise.

For many families, pensioners and people living alone, keeping the house warm has for an increasing number of household become less about comfort and more about difficult choices. Heat one room or the whole house? Fill the oil tank now or hope prices fall? Put another jumper on or switch the heating off a little earlier?

These are decisions that thousands of households continue to make every week.

Changeworks' new report, A Perfect Storm: 2026 Update on Fuel Poverty in Rural Scotland, confirms what many rural communities have been saying for years while energy prices may have eased from their peak, Ofgem energy price cap increased again on 1st July 2026 and the underlying problems have barely changed. This is a update on the 2023 report which we shared when it was published along with the 2023 report solutions 

One of the report's strongest messages is that rural Scotland cannot simply be treated the same as towns and cities. Most urban homes are connected to the gas network. Most rural homes are not.

Across urban Scotland, around 89% of homes use mains gas for heating. In rural Scotland that figure falls to just 40%. Instead, rural households are far more likely to rely on electricity or heating oil, both of which are generally more expensive ways to heat a home. Around 22% of rural homes depend primarily on electricity and 28% on heating oil. Heating oil is not protected by Ofgem's energy price cap, meaning prices can rise sharply whenever world markets become unsettled. Electricity prices remain closely linked to gas prices,  even in parts of Scotland that generate huge amounts of renewable electricity. For many rural households, it feels like paying twice over. Paying the highest of prices while being negatively impacted by majory energy infastructure.

Nationally, fuel poverty has fallen slightly since the worst of the energy crisis, but the picture remains deeply worrying.

In 2024, almost three in every ten Scottish households 29% were officially classed as being in fuel poverty, while 14% were living in extreme fuel poverty. Remote rural areas continue to fare significantly worse than the national average. The report points out that these figures remain well above pre-pandemic levels and warns that recent increases in energy prices could quickly reverse the modest improvements seen over the last year.

Heating bills are only part of the picture. Living in rural Scotland often means paying more for food, travelling further for work, healthcare and shopping, and spending considerably more on transport. Research quoted in the report suggests that working-age adults in remote rural Scotland require budgets around 26% higher simply to achieve an acceptable standard of living, rising to around 30% in Scotland's island communities. Meanwhile, many rural homes are older, larger and far more exposed to the weather than their urban counterparts.

Stone walls, detached properties, driving rain and strong Highland winds all combine to make homes more expensive to heat and much more costly to insulate or retrofit.

Perhaps the most striking part of the report isn't the percentages it's what people are actually doing.

Changeworks survey found that:

• 37% of people are very or extremely worried about paying their energy bills.
• 37% deliberately heat fewer rooms.
• 36% turn their heating off when they really need it on.
• 28% stay in bed longer simply to avoid heating their homes.
• Almost half reported that living in a cold home had affected both their physical and mental health.

These aren't just financial statistics. They're reminders that fuel poverty affects health, wellbeing, loneliness and quality of life every single day.

For many Highland communities, perhaps the greatest frustration is the contradiction at the heart of Scotland's energy system. Some of the country's biggest renewable energy developments are located in rural Scotland. Transmission lines cross our landscapes. Wind farms dominate many hillsides. New infrastructure continues to expand.

Yet many of the people living closest to that infrastructure continue to face some of Scotland's highest electricity bills.

The report argues that rural communities should benefit far more directly from the renewable energy generated in their own areas. It calls for greater investment in local energy infrastructure, stronger community ownership of energy projects and reforms that would finally break the long-standing link between electricity prices and gas prices.
Many people across the Highlands would probably ask a simple question:

If our communities are helping to power the country, why are so many struggling to afford to heat their own homes?

Changeworks maintain that there is no single solution.

Among its recommendations are:

• reforming electricity pricing so rural households are no longer disadvantaged;
• introducing a social energy tariff for vulnerable households;
• providing longer-term funding for home insulation and retrofit programmes;
• improving support for households that are off the gas grid;
• investing in local supply chains and skilled tradespeople; and
• enabling rural communities to benefit much more directly from local renewable energy generation.
  
  

It affects health, education, local businesses, family finances and the long-term sustainability of rural communities. The Highlands and Islands produce an extraordinary amount of renewable electricity, yet many households continue to ration heat, postpone filling oil tanks and worry about the next energy bill. Until that contradiction is addressed, many people will continue to feel that the benefits of Scotland's energy transition are passing straight over their rooftops. The 'storm' may have eased but for many rural households, it certainly hasn't passed.

 

Off the back of the  2026 update, Matthew Cole, Chair of the Scottish Fuel Poverty Advisory Panel gave a presentation with a  clear assessment of where Scotland currently stands in tackling fuel poverty and why a different approach is needed if the country's legally binding targets are to be achieved.

Scotland has committed to becoming virtually free of fuel poverty by 2040, with legally binding interim targets along the way.

Among those targets are reducing fuel poverty to no more than 15 per cent of households and reducing the median fuel poverty gap to no more than £350.

Matthew explained that, in the Panel's assessment, Scotland remains some distance from achieving those ambitions. Around 30 per cent of households remain in fuel poverty, with even higher levels in many rural and island communities. The median fuel poverty gap also remains significantly above the statutory target.

Based on the evidence currently available, Matthew said publicly that the legally binding 2030 target is unlikely to be achieved. If that milestone is missed, the longer term targets for 2035 and 2040 will become increasingly difficult to reach without a significant change in strategic direction. He also stressed that success cannot simply be measured across Scotland as a whole. The legislation requires progress across every local authority area. A strategy that delivers improvements in urban Scotland, while leaving rural and island communities behind, cannot be regarded as a success.

One of the strongest messages throughout Matthew's presentation was the importance of measuring progress properly. He explained that while a range of programmes and initiatives are underway, there is insufficient evidence demonstrating how individual actions contribute towards reducing fuel poverty or how effectively they address the recognised drivers of fuel poverty. Matthew questioned the absence of a comprehensive monitoring and evaluation framework, despite one having been planned several years ago.

Without proper monitoring, he argued, it becomes difficult to judge whether policies are achieving their objectives, whether investment is delivering value for money and whether enough progress is being made towards Scotland's statutory targets.

If governments cannot accurately measure outcomes, they cannot identify which interventions should be expanded, which require improvement and which may not be delivering the intended results. Matthew also highlighted the importance of continuing research to improve understanding of fuel poverty. He welcomed work being undertaken by organisations such as Changeworks, while suggesting that the Scottish Government should also continue developing its own evidence base to identify the policies most likely to make a meaningful difference.

Improving the energy efficiency of Scotland's housing stock remains an essential part of tackling fuel poverty, but Matthew cautioned against assuming it provides the complete solution. A well insulated home is undoubtedly beneficial, but people on very low incomes may still struggle to afford sufficient heating regardless of their property's Energy Performance Certificate. Addressing fuel poverty therefore requires attention not only to housing standards, but also to household income and the affordability of energy itself. Matthew also highlighted the importance of understanding how people actually use energy within their homes and ensuring that energy advice services remain available over the long term. Too often, successful advice services and crisis support programmes operate under short term funding arrangements. Matthew believes longer term funding would allow organisations to plan strategically and deliver more sustainable support for households experiencing fuel poverty.

Another important aspect of Matthew's presentation focused on household income. Reducing fuel poverty, he suggested, is not simply about lowering energy bills. It is also about increasing the disposable income available to lower income households. Matthew encouraged Scottish Ministers to consider policies within devolved powers that could increase household income, while also working with the UK Government to develop a more flexible and targeted Warm Home Discount scheme.

Rather than applying identical levels of support across the country, he suggested future schemes could respond more effectively to differing heating costs and local circumstances.

Matthew repeatedly returned to the unique challenges faced by remote rural and island communities. He believes fuel poverty in these areas requires a more focused and coordinated approach because the challenges differ significantly from those experienced elsewhere in Scotland.

Speaking about a recent visit to Shetland, Matthew described hearing local people repeatedly discussing Electricity Constraint Payments and the frustration that communities often feel when hosting major renewable energy developments while continuing to face high electricity costs. He said it was a topic he heard under discussion frequently while in Shetland - but something he had never heard discussed in a pub in Shewsbury where he lives! 

He questioned whether communities genuinely feel rewarded for supporting Scotland's transition to net zero if they continue paying some of the highest energy prices in the country. Matthew believes electricity pricing requires serious reconsideration if Scotland is to address fuel poverty fairly across rural and island communities. He also questioned why someone living on a low income in Cornwall currently receives the same £150 Warm Home Discount as someone living in the Highlands, despite Scotland's significantly colder climate and longer heating season.

For many people living across the Highlands and Islands, that observation will resonate strongly.

While much of England experienced temperatures exceeding 30°C during June and July 2026, many households across the Scottish Highlands were still lighting fires on cooler days. In many rural homes, open fires with back boilers continue to provide heating and hot water, yet these traditional systems often receive little attention within national discussions surrounding domestic heating or fuel poverty.

Matthew believes local communities have an essential role to play in tackling fuel poverty.

National policies provide an important framework, but local people understand the housing, weather, infrastructure and practical realities within their own communities better than anyone else.

Drawing on discussions during visits to Shetland and the Western Isles, Matthew explained that locally developed solutions often prove more successful because they reflect local circumstances rather than relying on approaches designed for very different parts of the country.

He also believes governments should provide organisations with longer term funding so communities have the confidence to plan ahead rather than continually working within short funding cycles.

By Christmas this year, Scottish Ministers are legally required either to publish a revised Fuel Poverty Strategy or explain to the Scottish Parliament why they have not done so.

Matthew believes the revised strategy is more important than ever.

However, he also stressed that publishing a strategy alone will not be enough.

It must be supported by effective governance, proper monitoring and evaluation, adequate resources and clear accountability for delivery.

Without those foundations, Scotland risks producing another strategy without demonstrating whether it is genuinely reducing fuel poverty.

Towards the end of his presentation, Matthew spoke briefly about his own experience, explaining that he lived in fuel poverty as a child.

That experience continues to shape his determination to ensure fewer people face the same circumstances in the future.

Despite outlining significant challenges, Matthew's message was ultimately one of optimism.

He believes Scotland already possesses many of the technologies, policies and support mechanisms needed to make substantial progress. The challenge is not waiting for future innovations, but making better use of the tools that already exist, learning from evidence and ensuring resources are directed towards the measures that achieve the greatest impact.

The Scottish Fuel Poverty Advisory Panel will shortly publish further work examining island fuel poverty, providing additional advice to Scottish Ministers as they prepare the revised Fuel Poverty Strategy.

Matthew concluded by making one point very clear. Fuel poverty should never be accepted as inevitable. Scotland has both the knowledge and the means to reduce it significantly. The task now is to ensure that policies are properly targeted, their effectiveness is measured and evaluated, and that remote rural and island communities receive the attention their circumstances demand.

Previous discussions

Fuel Poverty and Housing in the Highlands

Oil and LPG Users Financial Support