Pound;150 off energy bills: millions more will receive a winter discount

Following a U-turn by the government on the Winter Fuel Payment, the Warm Home Discount program has been expanded

We clarify who will receive the 150 discount.

Thanks to the government's expansion of the Warm Home Discount program, an additional 20.7 million households will receive 150 off their energy bills this winter.

Following a recent U-turn on the Winter Fuel Payment, which was previously only available to those receiving means-tested benefits, the payment will now be made to pensioners with taxable incomes of £35,000 or less annually.

Prime Minister Keir Starmer acknowledged that people were "still struggling with the cost of living" when he announced the change to the Warm Home Discount, saying that "extending this 150 energy bills support to millions more families will make a real difference."

No matter the size of their home, anyone receiving means-tested benefits will consequently see the money automatically deducted from their energy bills.

Previously, only people receiving means-tested benefits or those on the guaranteed element of Pension Credit who lived in a home with a high energy score were eligible for the payment.

The discount will now be extended to over six million households, including 11.8 million fuel-poor households. On July 1, the energy price cap will also drop by 7%, which will result in lower bills for those with variable tariffs.

"Good news for struggling households who haven't been eligible previously" is how Citizens Advice CEO Dame Clare Moriarty described the announcement.

She did, however, add: "But the 150 amount has not kept up with growing bills and will find it difficult to cover the expenses of families clearing a mountain of debt on top of skyrocketing monthly expenses.

One in ten households have energy debt, and the amount owed is increasing daily. Energy bills are also 52% higher than they were prior to the energy crisis, and prices are still unstable.

For whom will the Warm Home Discount apply?

Now, all billpayers receiving means-tested benefits are eligible for the £150 Warm Home Discount.

Therefore, the size, type, and home energy score criteria have been dropped.

In the past, the Warm Home Discount was only available to people who received the Pension Credit guarantee element or the savings element and had high energy expenses.

The Warm Home Discount will now be applied to all Pension Credit recipients who are the household's designated billpayer.

For whom is the Warm Home Discount paid?

In England, Scotland, and Wales, energy providers fund the Warm Home Discount, but the government determines who is eligible to receive it.

Those receiving means-tested benefits or those on the guaranteed element of Pension Credit who reside in a home that meets a "high cost to heat threshold" were the only ones eligible for the discount, as the previous government tightened the regulations.

Energy companies deduct the discount from their customers' bills, so people do not receive a 150 benefit.

In contrast, the Winter Fuel Payment, which is worth up to £300 per household and is given directly to eligible individuals over state pension age, is different. People's current accounts also receive cold weather payments, which total £25.

Since energy companies will bear the cost of expanding the Warm Home Discount program, households may be charged a standing fee.

In order to pay for this announcement, customers may notice a small increase in their energy bills.

The chief executive of the trade association Energy UK, Dhara Vyas, expressed her hope that additional steps would be taken to assist households with their electricity and gas bills.

"We hope to see more measures to help those most in need by moving forward 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, like moving the policy costs off electricity that currently make it artificially expensive because energy bills are still hundreds of pounds higher than at the beginning of 2022 and customer debt is at record levels."