- 2.7 million extra households will receive £150 off their energy bills next winter as the Warm Home Discount is expanded – putting money directly into people’s pockets
- this increases the number of households who are eligible to over 6 million in total – including 900,000 families with children and a total of 1.8 million households in fuel poverty
- latest intervention follows a raft of cost of living support for those who need it most – from expanding free school meals to childcare support – which is only possible after government stabilised the economy and fixed the foundations through the Plan for Change
Millions of households will see their energy bills cut by £150 this winter, as the government delivers another major package of support to ease the cost of living for working families through the Plan for Change.
Over 6 million households will benefit this year – an increase of 2.7 million households, including 900,000 more families with children and a total of 1.8 million households in fuel poverty. Every billpayer on means-tested benefits will now qualify, removing restrictions that previously excluded many who needed help and providing peace of mind to millions more families.
This major expansion of support for working families is the latest in a raft of cost of living support made possible because the government has stabilised the economy, fixed the foundations and repaired the public finances – deliberate choices which are helping provide security and more money in the pockets of working families through the Plan for Change.
Since last summer, interest rates have been cut 4 times, lowering mortgage costs, free school meals have been rolled out for over half a million more children so that kids can focus on learning rather than hungry bellies, free breakfast clubs are being expanded to every child in the country, school uniform costs have been cut, the 30 hours of free childcare scheme has been extended to more working parents.
Prime Minister Keir Starmer said:
I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill.
Providing security and peace of mind for working people is deeply personal to me as Prime Minister and foundational for the Plan for Change. I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.
Energy Secretary Ed Miliband said:
Millions of families will get vital support with the cost of living this coming winter, demonstrating this government’s commitment to put money in people’s pockets through our Plan for Change.
The energy price cap is also falling in July and today’s announcement adds a further £150 in direct support for millions.
This expansion of the Warm Homes Discount means families can plan for winter in the knowledge that they will receive support, giving them certainty and peace of mind before summer.
The government has also protected working people’s payslips from higher taxes, frozen fuel duty and are increasing the minimum wage to give pay rises of up to £1,400 a year to millions of low-income workers. Everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this winter, bringing the total to 9 million pensioners.
Today’s announcement goes even further than cutting energy bills by helping those who racked up debts during the energy crisis of 2022-2024. Backing Ofgem’s proposed debt strategy will cut consumers’ energy bills by reducing the cost of paying for energy debt, alongside other reforms.
The expansion of the Warm Home Discount will be offset by new efficiency savings across the energy system. For example, Ofgem have confirmed a decrease in the operating cost allowance of the price cap for the average billpayer which will take money off bills.
Ofgem’s plans to reduce the overall stock of consumer debt, which is currently recouped via a levy on all bills, will also produce savings that help to fund the Warm Homes Discount.
These reforms complement the government’s drive to bring down bills in the long term by replacing the UK’s dependence on fossil fuel markets controlled by petrostates and dictators with clean homegrown power.
This is the Plan for Change in action – combining short-term help with a proper long-term strategy for change that lowers people’s energy bills and puts more money in their pockets.
Adam Scorer, Chief Executive, National Energy Action said:
It’s hugely positive that across Great Britain, many more low-income households on means-tested benefits will get some direct support to tackle unaffordable bills and record energy debts this winter.
Vitally, this includes many more low-income working-age households with children, who are living with the daily consequences of not having access to enough energy at home.
Andrew Sissons, Deputy Director of Sustainable Future at Nesta, said:
Extra help for those households most in need is an important part of the energy bill system, and this change will go some way to help make energy bills fairer and more affordable for many this winter.
David Buttress, CEO of OVO, said:
This announcement is welcome relief for millions of families. Expanding the Warm Home Discount is a step in the right direction – targeting help where it’s needed most, directly into people’s pockets.
Dhara Vyas, Chief Executive, Energy UK said:
Extending the Warm Home Discount so that millions more households get help with their energy bills this winter is welcome news.
Energy bills are still hundreds of pounds higher than at the start of 2022 and with customer debt at record levels, we hope to see more measures to help those most in need – by pressing ahead with Ofgem’s debt relief scheme, accelerating progress on a new improved targeted support scheme and looking at other ways to cut bills right across the board, such as moving the policy costs off electricity that currently make it artificially expensive.
Chris O’Shea, CEO, Centrica said:
Today’s announcement will bring real warmth when it matters most. Expanding the Warm Home Discount means millions more families will see £150 off their energy bills this winter — and that’s welcome news.
I’m delighted that the Secretary of State has delivered this benefit for the millions of families who need help most. At Centrica, we’re proud to be doing our part too, helping customers through both the British Gas Energy Trust and the voluntary £140 million customer support package for British Gas customers.
Chris Norbury, CEO of E.ON UK, said:
We welcome the expansion of the Warm Home Discount, which will help ease pressure on millions of households this winter. Targeted support like this is exactly what’s needed to ensure energy is affordable for those who need it most.
A strong commitment to technologies and solutions that can lower bills today — such as insulation, solar panels, smart tariffs and battery storage — can make a meaningful difference to people’s lives.
Alongside the Future Homes Standard and funding for the Warm Homes Plan, this is another positive move towards a fairer, more affordable energy system for everyone.
Notes to editors
Today we have confirmed that following consultation, the Warm Home Discount scheme will be expanded to remove the high-cost-to-heat threshold in the current Warm Home Discount (England & Wales) Regulations 2022 (for winter 2025/2026) and increasing the level of spend available in Scotland for suppliers to allocate through the Broader Group.
The change will mean that all households where the means-tested benefit recipient (or their partner or legal appointee) is named on the energy bill will now be eligible to receive the £150 electricity bill rebate.
The number of families who will receive the discount for the first time, broken down by region, include:
- North East England: 100,000
- North West England: 280,000
- Yorkshire and the Humber: 210,000
- East Midlands: 160,000
- West Midlands: 270,000
- East of England: 250,000
- London: 570,000
- South East England: 350,000
- South West England: 220,000
- Wales: 110,000
- Scotland: 240,000
The number of additional households supported under the expanded scheme in each region is calculated by applying the regional proportion of qualifying benefit recipients from DWP’s statxplore tool to the total additional 6.1 million households estimated in the Warm Home Discount Expansion consultation document.
For the North West, for example, the proportion of qualifying benefit recipients is 13%, thereby 13% x 6.1m = 780,000 recipient households. Of these, 500,000 are already in receipt according to the most recent Warm Home Discount statistics (2023/2024), so around 280,000 are estimated to be additional.
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