04 Jun 2025
Investing in warmer social homes could save NHS £85 million a year, says CIH
New analysis from CIH shows that reaching EPC Band C in social housing would save the NHS over £85 million per year from 2030.
CIH is calling on the government to invest a minimum of £5 billion in retrofitting social housing at the forthcoming Spending Review to help realise these savings.
Each year, cold-related illnesses place extreme pressure on NHS services, especially in the winter. The energy efficiency of a home is a major contributing factor to the development in exacerbation of these illnesses, especially respiratory and cardiovascular problems [1].
Social housing providers have greatly improved the energy efficiency of their homes in the last fifteen years, with the number of homes at EPC Band C or better rising from 24 per cent in 2010 to 73 per cent in 2023 [2].
However, with wider financial pressures relating to building safety remediation, repairs and maintenance, and the need to build new social homes, CIH says that the government must boost the Warm Homes: Social Housing Fund and Warm Homes: Local Grant to help the sector meet its 2030 targets.
Commenting on the analysis, CIH director of policy, communications, and external affairs, Rachael Williamson, said:
“A warm, comfortable home is fundamental for our health and wellbeing. The social housing sector has invested huge amounts in energy efficiency in the last few years, but it is becoming increasingly clear that some providers will struggle to meet their 2030 targets without further government support.”
“These new figures show that if the government is serious about improving living standards and creating an NHS fit for the future, investing in making homes warmer needs to be high on the priority list at the forthcoming Spending Review.”
“CIH has welcomed the investment the government has already made in its Warm Homes capital schemes. However, with this funding only confirmed until 2028, boosting both programmes to take the total investment in social housing retrofit to at least £5 billion between now and the end of the decade is the minimum that is required.”
“Every home that we make warmer between now and 2030 reduces the risk of cold-related illnesses developing or getting worse, with a huge annual saving to the healthcare system if the sector is supported to reach EPC Band C by 2030.”
The figure of £85 million per year is calculated as follows. According to the government’s latest fuel poverty statistics, 897,000 social homes are FPEER Band D, 70,000 are FPEER Band E, and 13,000 are FPEER Band F or G. FPEER is Fuel Poverty Energy Efficiency Rating. For the purposes of this analysis, we take FPEER Band to be equivalent to EPC Band [3].
Publicly available data [4] shows that improving homes from EPC Band D or worse to EPC Band C has an NHS cost saving that can be modelled and quantified. The cost saving for each Band shift is shown below.
|
Starting EPC Band |
Ending EPC Band |
NHS cost saving per annum |
|
D |
C |
£73 |
|
E |
C |
£208 |
|
F or G |
C |
£445 [5] |
Multiplying the cost saving per home improved by the number of homes in each band generates a saving of £85,826,000, as shown below.
|
EPC Band shift |
NHS cost saving per annum |
Number of homes |
NHS cost saving per annum |
|
D to C |
£73 |
897,000 |
£65,481,000 |
|
E to C |
£208 |
70,000 |
£14,560,000 |
|
F or G to C |
£445 |
13,000 |
£5,785,000 |
Total NHS cost savings £85,826,000 per annum from 2030
[1] Institute of Health Equity (2022) Fuel Poverty, Cold Homes and Health Inequalities in the UK.
[2] CIH analysis of the English Housing Survey, multiple years.
[3] FPEER is almost identical to SAP, and FPEER bands are therefore almost identical to EPC bands. The only change between an FPEER rating and a SAP (EPC) rating is that in FPEER the fuel costs are adjusted before the energy cost is calculated. Any form of energy-related support (e.g. the Warm Home Discount) the household receives is subtracted from the fuel cost figure in the calculation of the FPEER rating. This means that some homes are shifted upwards; some homes that are EPC Band D become FPEER Band C after energy-related support is factored in. For the purposes of this analysis, we take the number of homes in each FPEER Band to be equivalent to the number of homes in each EPC Band. Practically, this means the figures and subsequent NHS savings we calculate are a slight underestimate. For more, see DECC (2014) Fuel Poverty Energy Efficiency Rating Methodology; DESNZ and BRE (2025) Fuel Poverty Methodology Handbook (Low Income Low Energy Efficiency) (2025), p,3.
[4] Data and NHS cost savings taken from National Energy Action, Newcastle University, and Energy Audit Company (2023) Warm Homes Fund Programme Evaluation: Final Report. See pp.173-175 for an explanation of the methodology and pp.155-157 for further detail. The exact NHS cost savings figures are taken from Table 4.12, p.157.
[5] Government fuel poverty statistics do not differentiate between EPC Band F and EPC Band G social homes, due to a small sample size in the English Housing Survey. We therefore use the NHS cost savings figure for movement from EPC Band F to EPC Band C, to ensure our estimate is a minimum reliable figure and does not overplay the much higher NHS cost savings for a home that moves from EPC Band G to EPC Band C.
