Warm Home Discount: better targeted support from 2022
Applies to England, Scotland and Wales
Read the full outcome
Detail of outcome
Having considered the consultation response, we intend to proceed with the extension and expansion of the Warm Home Discount scheme to 2026 and reforming the scheme in England and Wales.
The main consultation proposals that we will implement are:
- expanding the overall spending envelope to £475 million (in 2020 prices) each year for Great Britain
- increasing the value of the rebates to £150
- maintaining the current Core Group 1, continuing to provide rebates to around one million low-income pensioners
- creating a new Core Group 2 of around 1.9 million households on low incomes and with high energy costs, identified through data matching. Rebates to this group will be awarded automatically
- making Industry Initiatives mandatory, in recognition of the valuable support to households through this energy-related and financial measures
- introducing changes to specific Industry Initiatives measures to better target the support towards households in need
- reducing the supplier participation thresholds in 2022 to 2023 and further in 2023 to 2024
We have also decided to make the following changes in light of the responses to the consultation:
- including Housing Benefit in the qualifying means-tested benefits in Core Group 2
- requiring Ofgem to monitor the levels of spending under each Industry Initiative in relation to disabled households, through estimated annual reporting from energy suppliers
- while we will adjust the overall value of Industry Initiatives each year by up to £10 million to offset fluctuations in the rebates, we will not adjust the value further in year by £5 million as we had proposed
- maintaining the overall debt write-off cap under Industry Initiatives at £6 million per year
The government will lay the regulations at the earliest opportunity for the scheme years up to 2025/2026. While the regulations will come into force after the usual start of the scheme year, spending on Industry Initiatives incurred between 1 April 2022 and the regulations coming into force will count towards suppliers’ obligations, as long as they are subsequently approved by Ofgem.
The government has consulted on separate arrangements concerning a Warm Home Discount scheme in Scotland.
Warm Home Discount (England and Wales): draft eligibility statement
Read the consultation on a draft eligibility statement as required under Regulation 9 of The Warm Home Discount (England and Wales) Regulations 2022.
Detail of feedback received
We received 87 responses to the consultation from a range of:
- energy suppliers
- charities and consumer bodies
- housing associations
- local authorities
- public bodies, including the energy regulator, Ofgem
- members of the public
There was general support for the expansion and reform of the Warm Home Discount scheme and the main proposals in the consultation.
Original consultation
Consultation description
The Warm Home Discount scheme obliges participating energy suppliers to provide rebates to their customers, to reduce energy bills for low-income and vulnerable households and tackle fuel poverty.
This consultation proposes to expand and reform the scheme in England and Wales until 2026, in line with the commitments announced in the Energy White Paper in 2020. The objective of the reforms is to improve the fuel poverty targeting rate of the scheme and ensure more fuel poor households can receive rebates on their energy bills automatically, through the use of data matching. An Impact Assessment setting out the impact of the proposals accompanies this consultation.
We would particularly welcome responses from energy suppliers and charities and other organisations focusing on fuel poverty and vulnerable people.
See the BEIS consultation privacy notice.
Please do not send responses by post to the department at the moment as we may not be able to access them.
Documents
Updates to this page
Published 28 June 2021Last updated 22 July 2022 + show all updates
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Link to Warm Home Discount (England and Wales): draft eligibility statement consultation added.
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Government response published.
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2 Draft Regulations on Warm Home Discount added.
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Process description for identifying high cost households updated.
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First published.