British Gas and Centrica profits exceed £60 billion since privatisation

The End Fuel Poverty Coalition has calculated that British Gas and its parent company Centrica have made more than £60 billion in profit since the energy market was privatised in 1986. That is a staggering sum, roughly £1.6 billion a year for nearly four decades, and it lands at a moment when millions of UK households are struggling to pay their bills and invest in basic energy-saving measures.

As reported by the End Fuel Poverty Coalition, the figure covers all operations including British Gas, Centrica Storage, and its North Sea gas production. The coalition argues that such profits should have been used to shield customers from price spikes, especially during the energy crisis that began in 2021.

What £60 billion means for your energy bill

To put that number in perspective: £60 billion could cover the entire cost of the Energy Price Guarantee for two years, the scheme that capped typical household bills at £2,500 in 2022-23. It could also pay for loft insulation in every home rated EPC D or below, roughly 8 million properties, at a typical cost of £500 each.

Instead, the money has flowed to shareholders and executive pay. Centrica’s dividend payments alone exceeded £1 billion in 2023. Meanwhile, the average household energy bill this winter will be £1,928 a year under the October price cap, 60% higher than in 2020.

For homeowners trying to improve their EPC rating, the gap is stark. A typical heat pump installation costs £7,000 to £13,000. The Boiler Upgrade Scheme offers £7,500 off, but only for a limited number of applicants. Cavity wall insulation runs £2,000–£4,000. Many households simply cannot afford the upfront cost, even if the long-term savings are clear.

The catch with windfall taxes and grants

The government has imposed a windfall tax on oil and gas producers, the Energy Profits Levy, at 35% on top of the normal 25% rate. But Centrica’s British Gas retail arm is largely exempt because it buys gas rather than extracting it. The levy has raised about £2.6 billion so far, a fraction of the £60 billion headline figure.

What this misses is the structural problem: energy companies have little incentive to push efficiency upgrades that reduce consumption. British Gas runs its own insulation and heat pump schemes, but take-up is low. Ofgem data shows that fewer than 50,000 heat pumps were installed under the government’s main grant scheme in 2023, against a target of 600,000 per year by 2028.

Yet the technology works. A typical 3-bed semi with a heat pump and good insulation can save £400–£600 a year compared to a gas boiler, according to the Energy Saving Trust. The payback period is 10–15 years, if you can afford the upfront cost.

Who qualifies for help, and who doesn’t

The government’s main support programmes target low-income households. The Energy Company Obligation (ECO4) scheme requires large suppliers to fund insulation and heating upgrades for those on benefits or with low incomes. Since 2022, it has helped about 300,000 homes. But eligibility is narrow: you must receive means-tested benefits like Universal Credit or Pension Credit.

For the squeezed middle, households earning £30,000–£50,000 with a poor EPC rating, there is no direct grant. The Boiler Upgrade Scheme is income-blind, but it only covers heat pumps, not insulation. A homeowner who cannot afford the insulation first will not get the full benefit of a heat pump.

Ofgem’s own figures show that 6.5 million households are in fuel poverty, meaning they spend more than 10% of their income on energy. The £60 billion profit figure shows the industry could afford to do more, but shareholders come first.

What you should do now

If you are a homeowner, check your EPC rating at gov.uk. If it is D or below, you may qualify for ECO4 or local authority schemes. Call your energy supplier, they are obliged to tell you what help is available. For heat pumps, apply for the Boiler Upgrade Scheme through Ofgem’s portal; the grant is £7,500 until March 2025, and the government has pledged to extend it. If you cannot afford upgrades now, start with low-cost measures: draught-proofing costs £50–£100 and can save £40 a year. The £60 billion profit figure is not going to change overnight, but your heating bill can.