Govt proposed £150 Rebate on Warm Home Discount Scheme 2025-26: The UK government is planning to expand the Warm Home Discount Scheme (WHD) for 2025-26 to help more low-income households reduce their electricity bills. The scheme, which has been supporting vulnerable households since 2011, aims to make energy more affordable, especially as many families still struggle with high costs of living. Let’s understand what changes are proposed and how they will impact households.
What is the Warm Home Discount Scheme?
The Warm Home Discount Scheme is a government programme that gives eligible households a £150 rebate on their electricity bills during winter. It is meant to support low-income and vulnerable groups, including pensioners and those on certain benefits, helping them manage their energy costs during cold months.
Why is the Government Expanding the Scheme?
Although energy prices have dropped from their peak in 2022, energy bills remain high compared to previous years. Many households, especially low-income ones, still struggle to keep their homes warm. The government wants to reduce fuel poverty—a situation where families can’t afford to heat their homes properly.
In addition, the UK government has a statutory duty to ensure that as many fuel-poor homes as possible reach minimum energy efficiency standards (Band C) by 2030.
What are the Proposed Changes for 2025/26?
1. Widening Eligibility
Currently, only those on means-tested benefits AND living in homes that are expensive to heat qualify under “Core Group 2.” The government proposes to remove the “high cost to heat” requirement, making all households on means-tested benefits eligible for the £150 rebate. This would help an additional 2.7 million households, increasing total beneficiaries to about 6.1 million across Great Britain.
2. Changes in Scotland
In Scotland, the scheme works slightly differently. The government plans to increase the funds available for Scottish suppliers to offer rebates to more low-income households. However, they will retain the Broader Group, which gives suppliers some flexibility in choosing eligible households based on existing regulations.
3. Including Previously Excluded Households
Currently, people living in Park Homes or those who pay energy bills indirectly (like through landlords) don’t always qualify for WHD. The government is considering expanding support to include these groups, without increasing the overall budget set for Park Homes. This would include people living in houseboats, caravan sites, or other non-standard homes.
How Will This Affect Energy Bills?
Expanding the scheme means more people will get help, but it may increase energy costs for all customers slightly. The average annual energy bill may go up by around £15 (from £22 to £37), as all customers pay a small amount through their bills to fund the WHD. However, the government says other measures under discussion could reduce energy costs and balance out this increase.
Who Will Benefit Most?
- Pensioners on Pension Credit will continue to get automatic rebates.
- More families with children, disabled people, and working-age low-income households will benefit.
- Households previously left out because of the “cost to heat” rule will now get support.
Possible Impact on Fuel Poverty
By expanding the scheme:
- Coverage of fuel-poor households will rise from about 30% to 45%.
- More families struggling to pay energy bills will receive help.
- However, some low-income households not on means-tested benefits may still miss out, as eligibility is linked to benefit status.
What are Industry Initiatives?
Apart from rebates, WHD funds Industry Initiatives, like:
- Debt relief for energy bills
- Energy efficiency advice
- Heating system upgrades
These initiatives will continue to be supported, though part of the budget may be redirected if new groups (like those in Park Homes) are included.
How to Give Your Opinion?
The government is inviting public feedback on these proposals until 24 March 2025. You can respond online or email at whd.consultation@energysecurity.gov.uk.
The expansion of the Warm Home Discount Scheme aims to help more low-income households deal with rising energy costs. By removing the heating cost threshold and broadening eligibility, millions of additional families may receive much-needed relief. Although there is a slight cost increase for all energy customers, the government believes the benefit of reducing fuel poverty and improving living conditions for vulnerable households makes this a worthy investment.
If approved, these changes would take effect for the 2025/26 winter season, making energy bills more affordable for many struggling families in Great Britain.
FAQ
What is the Warm Home Discount Scheme?
The Warm Home Discount Scheme offers £150 off electricity bills for low-income and vulnerable households during winter.
Who will be eligible under the new proposed rules?
All households receiving means-tested benefits, without the ‘high cost to heat’ requirement, plus groups like Park Homes residents.
How much will the rebate be in 2025?
The rebate is proposed to remain at £150 per eligible household under the expanded scheme.
Will this affect everyone’s energy bills?
Yes, energy bills may increase by around £15 per year on average to fund the expanded Warm Home Discount Scheme.
When will these changes take effect?
If approved, the changes will apply for the winter 2025/26 season to help more low-income households.
