The government is bringing forward strengthened support for millions of households to help pay their energy bills next winter.
- Nearly 3 million more families would be eligible to receive the £150 Warm Home Discount next winter under new proposals to help people with their energy bills
- 1 in 5 families in Britain would get help with their bills through these proposals, giving households a helping hand to deal with an unpredictable international energy market
- comes alongside plans to accelerate a debt relief scheme which will help tackle debt and reduce households' energy costs
Almost 3 million more households, including almost 1 million households with children, would get support to pay their energy bills next winter, as the government consults on proposals to offer more support to consumers across the country.
Due to global gas price spikes this winter and the continued impacts of Russia's invasion of Ukraine, the energy regulator Ofgem has announced today (Tuesday 25 February) an increase in the energy price cap for April to June 2025. This price is set independently of the government, reflecting changes in wholesale prices and global markets.
In response, the government is acting to protect billpayers by consulting on the expansion of the Warm Home Discount, giving eligible households £150 off their energy bills. This would bring around 2.7 million households into the scheme - pushing the total number of households that would receive the discount next winter up to an estimated 6.1 million.
Energy Secretary Ed Miliband said:
This is worrying news for many families.
This government is determined to do everything we can to protect people from the grip of fossil fuel markets. Expanding the Warm Home Discount can help protect millions of families from rising energy bills, offering support to consumers across the country.
Alongside this, the way to deliver energy security and bring down bills for good is to deliver our mission to make Britain a clean energy superpower- with homegrown clean power that we in Britain control.
The government will also work closely with Ofgem to accelerate proposals on a potential debt relief scheme, first consulted on last year, to target unsustainable debt built up during the energy crisis.
The proposed debt support scheme, alongside the Warm Home Discount, is an important first step to cut the costs of servicing bad debt, which is currently contributing to higher bills for all billpayers. Under these plans, the target would be to reduce the debt allowance to pre-crisis levels, with Ofgem estimating that these plans could lower these costs by £25 to £30 per year.
This additional support for households complements the government's mission to make Britain a clean energy superpower, delivering energy security and bringing down bills for good. The expected rise in the price cap shows once again the cost of remaining reliant on the unstable global fossil fuel markets that are driving price increases. Three years on from Russia's invasion of Ukraine, wholesale gas prices have now risen by 15% compared to the previous price cap period, which is directly affecting the cost of generating power and heating of homes. Moving to a power system based on homegrown, clean energy will reduce the UK's reliance on volatile markets and protect billpayers.
To achieve this, government has set out the most ambitious reforms of the UK's energy system in a generation. Within its first 8 months in office, the government has lifted the onshore wind ban, established Great British Energy, approved nearly 3 GW of solar, delivered a record-breaking renewables auction and kickstarted the carbon capture and hydrogen industries in the UK. Reforms to nuclear planning rules have also been introduced to clear a path for smaller, and easier to build nuclear reactors - helping to deliver energy security, grow the economy and deliver clean, cheap energy.
Ofgem CEO Jonathan Brearley said:
Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers.
We're developing plans that could give households with unmanageable debt the clean slate they need to move forward. We welcome the government's support for these plans, and their plans to expand the Warm Home Discount, which will also offer financial help to nearly 3 million more households that need it most.
While the government presses on with the clean power mission, swift action has already been taken to shield energy consumers from high prices. These measures include:
- extended the Household Support Fund to provide help through local councils to struggling households with essential costs, including energy bills
- worked with energy suppliers to negotiate a £500 million winter support package for consumers
- rolled out the next steps of the Warm Homes Plan, which will upgrade 300,000 homes this financial year
- consulting on boosting living standards in the private rented sector by requiring all private landlords in England and Wales to meet Energy Performance Certificate (EPC) C or equivalent in their properties by 2030, which will help a million renters out of fuel poverty
- announced a comprehensive review of the energy regulator Ofgem, empowering it to facilitate growth and innovation and become a stronger champion for consumers
- driving forward with pro-consumer reforms:
- challenging unlawful back billing; taking action on inaccurate bills
- driving the smart meter rollout
- giving every family the option of a zero standing charge tariff, so they have more choice in how they pay for their energy
- ensuring compensation for wrongful installation of prepayment meters
In addition, government has also moved quickly to protect working people from wider cost of living pressures, including:
- helping to keep prices down at the pumps by freezing fuel duty for an additional 12 months, saving motorists £3 billion in 2025 to 2026
- targeting support with the largest increase to the Carer's Allowance earnings limit since it was introduced in 1976 - worth £41 a week
- capping the amount that can be deducted cut from Universal Credit payments when repaying short-term loans and debts, saving 1.2 million of the poorest families in the UK £420 a year on average
- through the government's commitment to the Triple Lock, millions will see their State Pension rise by up to £1,900 over this parliament
Taken together, these reforms will help to improve the lives of working people and put more money in their pockets, secure home-grown energy and kickstart economic growth, as part of the Prime Minister's Plan for Change. Through this ambitious programme, the government will deliver a decade of national renewal and fix the foundations of the country.
Notes
The consultation sets out proposals to expand the reach of the Warm Home Discount Scheme by removing the high-cost-to-heat threshold in the current Warm Home Discount (England and Wales) Regulations 2022 (for winter 2025 to 2026) and increasing the level of spend available in Scotland for suppliers to allocate through the Broader Group. All households in receipt of means-tested benefits would then be eligible to receive the £150 electricity bill rebate.
If you live in England and Wales, you currently qualify for the Warm Home Discount if you either get the Guarantee Credit element of Pension Credit, are on a means tested benefit and have high energy costs.
If you live in Scotland, you currently qualify if you either get the Guarantee Credit element of Pension Credit, are on a means tested benefit in Scotland and / or meet your energy supplier's criteria for the scheme.
