Fuel poverty has serious consequences for households. It means worsening physical and mental health, particularly for children, older people and those with existing health conditions, while also increasing pressure on public services and reducing economic productivity.
The issue is especially acute in rural Scotland, where households face overlapping pressures including higher heating costs, weaker energy infrastructure, energy-inefficient homes, higher living costs and limited affordable housing. These factors, plus structural barriers, can hinder effective support for rural and island communities.
On this page:
Background
This report provides an update to Changeworks’ 2023 analysis Perfect Storm: Fuel Poverty in Rural Scotland.
It draws on the latest Scottish House Condition Survey, a nationally representative survey commissioned by Changeworks (March 2026), and a workshop with stakeholders from rural and island areas.
The report examines how fuel poverty in rural Scotland has changed, which drivers of fuel poverty remain most acute, and what action is needed from the UK and Scottish Governments, local authorities, housing providers and delivery partners.
The 2023 report was commissioned by Rural & Islands Housing Associations Forum, Highlands & Islands Housing Associations Affordable Warmth Group, and Highlands and Islands Enterprise.
Changeworks has produced this 2026 update independently and is solely responsible for the content of this report.
Key findings
Fuel poverty remains significantly above pre-pandemic levels
29% of households were in fuel poverty in 2024, with 14% in extreme fuel poverty. The current energy crisis and energy market volatility put even more households at risk.
Rural heating and associated costs are structurally different
Fewer rural homes use mains gas and a higher proportion use alternative heating fuels (urban vs rural: gas 89% vs 40%, electricity 8% vs 22%, oil 1% vs 28%). Households using electricity for primary heating are disproportionately represented among those in fuel poverty, reflecting higher costs and standing charges.
Energy market volatility exposes off-grid households
Households relying on heating oil remain vulnerable to price swings because oil is not covered by the Ofgem price cap.
Housing and retrofit challenges remain
Rural housing is often older, more exposed and complex to upgrade, and rural geographies increase upgrade costs.
Delivery constraints slow progress
Supply chain limits, skills availability, and short-term or disconnected funding cycles limit the reach and efficiency of retrofit and advice programmes; delays in smart meter rollout in remote areas can restrict access to favourable tariffs.
Solutions to rural fuel poverty
The initial 2023 report recommended a set of actions to tackle rural fuel poverty. However, a large number of these have seen no progress to date and remain sorely needed.
Based on these original actions, this report sets out more immediate measures to protect households, alongside steps to reduce exposure to future price shocks and permanently lower energy demand.
Progress electricity pricing reform, including decoupling electricity and gas prices and introducing a social energy tariff to protect vulnerable households.
Expand apprenticeships and sector training; improve access to public procurement for microbusinesses (including group purchasing approaches) to build resilient local supply chains.
Introduce a rural uplift for flat-rate payments; improve how need is assessed beyond benefit eligibility; and expand devolved scheme eligibility so off-gas households are included by default.
Provide long-term multi-year funding for householder retrofit programmes, supporting fabric-first improvements and appropriate low-carbon heating to achieve lasting bill reductions.
Align and extend funding cycles for energy advice and retrofit delivery programmes to enable long-term planning and reduce administrative burden for local authorities, housing providers and delivery partners.
Incentivise investment in rural energy networks with housing providers and local authorities and expand community ownership so rural areas benefit more directly from local renewable generation.
Download the Perfect Storm 2026 report
To read A Perfect Storm: 2026 Update on Fuel Poverty in Rural Scotland report in full, simply enter your details below.