An enhanced Warm Home Discount scheme could help more people this winter

For many of us, winter is a season of cosy evenings, warming food, and time spent in comfort with family, but for the projected 6 million people living in fuel poverty in the UK in 2024, it can instead be a period of severe stress and potentially life-threatening cold.

With winter on the way, and the energy price cap set to rise by £149 in October, there is an imminent risk to low-income households of falling into debt over their energy bills, making it harder to pay for essentials and pushing them into a cycle of poverty. 

The Autumn budget will be announced on October 30th, and gives the Government an opportunity to work with Ofgem, consumer groups, and the energy sector to lock in much needed support for the UK’s most vulnerable people during the potentially difficult months to come. Our priority is our customers, and that’s why we back calls by Citizens Advice to deliver an enhanced Warm Home Discount (WHD) scheme that would offer more help to more people this winter. 

Enhancing the Warm Home Discount

In 2023/24, the WHD delivered energy bill rebates of £150 each to around 3 million Great British households, most of them in social housing or with a lead beneficiary over 76 years old. 

Working with the Government, Ofgem, consumer groups, and other energy sector stakeholders, we would like to develop new and lasting solutions for helping more people in more focused ways. The Government’s work to reform child benefit and collect household income data could help us do exactly this by providing the information we need to offer targeted support to those on the lowest incomes, but this is unlikely to happen until 2025/26. 

In the meantime financially vulnerable customers will still struggle to heat their homes. With the weather already beginning to turn an expansion of the WHD is the best available solution, offering more direct and effective support than additions to the wider welfare system which could not be guaranteed to go towards customers’ energy needs. 

The WHD could be enhanced either by increasing the rebate so that each eligible household receives more help, or by expanding eligibility to include more of the roughly 4.5 million households that receive means tested benefits but are not WHD-eligible.

Either option would require additional funding, but could make a big difference for millions of people this winter, and potentially save lives. That’s why we would be happy to co-fund enhancements with generators, network operators, other suppliers, and the Government, following an approach that has already been tried and tested in the Netherlands.

Winter is on the way, and it's on us to act

There is limited time left to put measures in place for protecting vulnerable households this winter. Whether it’s through an enhanced WHD or some other solution the Government and Ofgem can rely on our support, but we are also paving the way for new and innovative approaches to affordability. 

For example, we are launching a pilot in Coventry to install batteries combined with a smart time of use (ToU) tariff in a small number of financially vulnerable households. This could not only save them between £250 and £300 a year, but total WHD payments over the 20-year lifespan of a battery would be enough to finance its installation. This means that the funding currently allocated to the WHD could be used to deliver double the benefits to customers, which is why we would back any proposals in the budget to fund an even bigger pilot. 

Whatever the outcome on October 30th, we will keep working in partnership with the Government, Ofgem, consumer groups, and the rest of the energy industry to make sure no household is left behind this winter, because it’s on us to make new energy work for everyone.