Energy Pressures Mount as UK SMEs and Charities Brace for a Costly Winter

As the UK heads into winter, energy costs remain a major source of uncertainty and strain for small and medium-sized businesses and the charity sector. While wholesale market volatility has eased compared with the extreme spikes of recent years, overall energy costs remain elevated, and new policy charges are set to add further pressure. For organisations still recovering from years of unpredictability, these factors are making it increasingly difficult to plan ahead with confidence.

How Rising Energy Costs Are Impacting SMEs and Charities

Recent research from Cadent and Thinks Insight & Strategy’s Energy Diaries 2025 sheds light on how these cost burdens are affecting SMEs and charities across the UK, and what kind of support they most urgently need.

• Operational Pressure: Rising energy costs and increased service demand are causing concern for many SMEs and charities, with 52% of charities and 39% of SMEs worried about their ability to remain operational over the next five years. 

• Heating and Daily Operations: For many organisations, heating is increasingly difficult to prioritise: 60% of charities and 50% of SMEs report that heating is becoming a luxury rather than a basic necessity, forcing careful management of energy use as winter approaches.

• Impact on Services: Higher energy costs are forcing some charities and small businesses to reduce or alter the services they offer. 57% of charities and 42% of SMEs indicate that rising energy bills are directly impacting service levels.
  
• Impact on Sustainability Efforts: 34% of charities report that sustainability initiatives are being deprioritised due to cost pressures.

• Need for Guidance: Organisations are actively seeking reliable, centralised energy efficiency advice, with 58% of SMEs and 78% of charities reporting a need for a trustworthy source to help them make informed decisions under financial pressure.

New Nuclear Levy Increases the Strain

Adding to these pressures is a new nuclear levy, taking effect in November 2025 to fund the Sizewell C project, which is expected to raise energy bills for small businesses and charities. While households will see a modest increase of around £12 per year, most charities will face increases of £100 to £240, while some organisations with higher energy use could see hikes of up to £2,500.

Exemptions for energy-intensive industries, such as steel, cement, and glass-making, mean that smaller businesses and charities will shoulder a disproportionate share of the costs. Trade groups warn this could constrain growth, increase operational pressures, and make switching to low-carbon heating solutions more difficult.

Winter Heating A Critical Challenge for SMEs and Charities

Rising energy bills are forcing organisations to make difficult choices about keeping premises warm, particularly in energy-intensive sectors like hospitality and community services, while charities face tighter budgets that make maintaining adequate heating difficult.

For many, this pressure means reducing service hours, delaying upgrades to low-carbon heating, or absorbing costs that could otherwise support core services. Combined with the new nuclear levy, heating costs are now a significant operational concern. Effective energy management and access to expert guidance are essential to help these organisations remain functional, protect staff and service users, and navigate the winter safely.

How Smarter Business Helps SMEs and Charities Navigate Rising Energy Costs

In the current energy landscape, SMEs and charities face difficult choices in managing rising bills and maintaining operations. Smarter Business supports organisations by providing energy procurement services to secure competitive electricity and gas contracts, helping reduce costs and improve budgeting certainty. Our team of experienced business energy experts conducts a comprehensive analysis of the market to identify the most effective energy solution for each organisation’s needs.

We also help organisations transform their energy management through smart monitoring systems. These tools provide clear, real-time insights into energy usage, allowing organisations to track patterns, identify inefficiencies, and make informed decisions to control consumption. Regular reporting highlights opportunities to reduce costs and optimise operations, helping SMEs and charities manage budgets more effectively while maintaining operational performance.

In addition, Smarter Business provides practical support through bureau services and dedicated account management. This includes checking invoices for accuracy, tracking usage trends, and offering ongoing guidance to help organisations manage energy efficiently. By keeping a close eye on consumption and costs, we help SMEs and charities avoid unexpected charges, improve energy efficiency, make better-informed decisions, and focus resources on delivering their core services.

Partner with Smarter Business for Smarter Energy Procurement and Management

SMEs and charities are the backbone of their communities, providing essential services and driving local growth. In today’s challenging energy landscape, it is vital that these organisations have the support they need to thrive. 
Contact Smarter Business today to explore how our practical energy solutions can help your business remain resilient this winter and beyond.