Contact: Sarah Wright, Head of Communications, NEA. Sarah.wright@nea.org.uk / 07884371913
The UK Government has today confirmed the immediate future of the Warm Home Discount (WHD) energy rebate scheme which was due to end in March 2021 and has now been extended for a year. Following a long campaign to extend and expand the programme, NEA has welcomed the news saying the policy provides a “winter lifeline” to millions of the poorest pensioners across Great Britain.
Peter Smith, Director of Policy and Research at NEA comments:
“As incomes fall and more people are needing to spend longer at home using energy, millions of the poorest energy consumers are having to choose between heating their home adequately or falling into debt. The Warm Home Discount scheme ensures the most vulnerable pensioners receive energy rebates automatically and are better able to afford to keep their homes adequately warm over winter. The year extension is welcome and it’s encouraging that the UK Government is increasingly recognising the value of this winter lifeline for millions of the poorest consumers across Great Britain”.
Whilst welcoming confirmation of the immediate future of the scheme, NEA says millions of the poorest working age consumers are still unaware of the Warm Home Discount and even when customers are eligible for help and know how to apply, their applications are often unsuccessful because there is an insufficient annual budget. They say they will continue to campaign for the upcoming Comprehensive Spending Review (CSR) to provide longer-term clarity on the future of the scheme and its expansion to ensure all eligible low income working age households receive the rebate automatically without needing to apply each year to their supplier.
Smith continues:
“The proposals set out today do not help up to two million British households who miss out on the energy rebates each year, despite them being eligible for support and paying for the cost of the policy through their energy bills. The upcoming Spending Review must expand the scheme and act on current powers which allow Government to ensure that all those eligible for the WHD rebate actually receive it without reducing payments for current low-income pensioner recipients”.
The charity says they will also push for longer-term clarity that WHD “Industry Initiatives” will be expanded. Without this longer-term certainty, many community and voluntary organsiations who deliver debt and energy advice assistance through this element of the scheme won’t be able to plan effectively and do as much as they would want to respond strategically to the increased demand for their services due to the pandemic and its likely long-term economic impact.
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Notes to editors
- National Energy Action (NEA) works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm and safe home. We aim to improve access to energy and debt advice, provide training, support energy efficiency policies and co-ordinate other related services which can help change lives.
- The Warm Home Discount scheme provides a payment of £140 (inclusive of VAT) towards energy bills and also contains provisions to carry out projects to help low-income and vulnerable households to better afford their energy bill. The scheme was introduced by the Government in April 2011 and is an obligation on energy suppliers funded through bills. Currently, there are two ways to qualify for the Warm Home Discount Scheme rebate:
- Being a low-income pensioner in receipt of the Guaranteed Credit element of Pension Credit (known as the ‘Core Group’). This group receives the payment automatically and won’t need to apply to their supplier
- Meeting an energy supplier’s criteria, based on means-tested benefits, of being in a low-income working age household (known as the ‘Broader Group’). This group applies for the scheme on the supplier’s own application process
- A third element of the scheme allows suppliers to help fuel poor customers through third parties: this is known as the ‘Industry Initiative’. It can offer advice on energy saving and help with reducing energy debts. Whilst the UK government co-ordinates data matching to find households who are eligible for a rebate through the Core Group, the energy regulator, Ofgem, administers the Broader Group and Industry Initiatives.
- In February this year, NEA and Fair By Design (FBD) established a joint campaign calling for the following:
- The UK Government to extend and expand the Warm Home Discount (WHD) scheme for at least three years
- The UK Government to ensure current low income pensioners continue to receive WHD rebates and ensure the extended and expanded scheme uses data matching powers to guarantee all eligible low income working age households receive the rebate automatically
- The UK Government to ensure smaller suppliers are also required to provide all elements of the WHD
- Ofgem to ensure the WHD is better designed i.e. ensure that more customers know about it and there are more channels to apply for it via Industry Initiatives
- For all energy suppliers to implement the new WHD policy before the start of the new phase of the scheme in April 2021, and regularly liaise with customers to see whether the WHD is meeting their needs
- For those suppliers to continue making sure consumers have access to hardship grants, and energy/fuel debt advice.
Our full briefing, including costings and how our recommendations can be achieved, are found in an accompanying document found here
- On 21 July, the Chancellor launched the 2020 Comprehensive Spending Review (CSR). The Review, which will be published in the autumn, will set out the UK Government’s spending plans for the parliament. As part of our detailed submission, NEA repeated its calls for long-term certainty for the programme, set out which improvements should be implemented and highlighted how this outcome could be achieved in a cost neutral way.
