Our January 2026 roundtable shifted the lens from “pricing resilience” to a more immediate constraint on UK infrastructure delivery:

What is the risk that future consumers will be unwilling to pay for today’s infrastructure investment—and how should that reshape regulation and the cost of equity? 

Drawing on Vallorii’s affordability modelling and VAPRI (Vallorii Price of Risk), we connected household bill pressure to political/regulatory risk premia—and then to hurdle rates, allowed returns, and valuations across sectors. Our analysis suggests the UK is entering an affordability cycle: weaker affordability can erode regulatory credibility, which raises the cost of capital, which in turn makes future bills higher.

What we discussed

1) Quantifying affordability, not hand-waving it.We benchmarked UK utility bills at ~7.3% of disposable income, versus ~3–5% in European comparators, and forecast bills rising ~21–25% by 2040, with bills peaking at ~8.6–9.0% of median household income. Our modelling implies ~45–49% of the population could be spending >10% of income on utilities by 2040—turning affordability into a system-wide investment constraint, not a sector-specific talking point.

2) Affordability as a cost-of-equity driver via political risk.Participants focused on how bill pressure translates into non-diversifiable political and regulatory risks, particularly for irreversible capex. In a case study on electricity transmission, VAPRI estimates ~30–130 bps cost-of-equity impacts for projects most exposed to future demand and policy uncertainty (e.g., offshore-wind-driven buildout).

3) What regulators can do to lower the premium.Discussion centred on practical levers that can reduce affordability-linked risk premia without pretending there’s a “free lunch,” including:

• Lengthening regulatory periods to increase long-horizon confidence,

• Faster cost recovery to reduce reliance on distant regulatory decisions, and

• More progressive cost recovery (including partial funding via general taxation) to reduce the political sensitivity of bills for low-income households.

Polling in the room reinforced the direction of travel: most participants expect affordability to worsen over the next decade, and most argued that affordability creates material political risk that should push required returns up, not be ignored.

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