Source · Select Committees · Energy Security and Net Zero Committee
Recommendation 6
6
Deferred
Retarget Warm Home Discount using tiered approach linked to need, usage, and wholesale prices.
Conclusion
From winter 2026–27, the Warm Home Discount should be retargeted using a tiered approach, so that funding is allocated based on household need and energy usage, and the value of the rebate should be linked to wholesale prices. (Recommendation, Paragraph 29)
Government Response Summary
The government states it will explore improvements to the Warm Home Discount scheme, including the level of support and reach, following a consultation. It notes the committee's recommendation to link the rebate value to wholesale prices and aim for a more targeted scheme, but does not commit to a specific tiered approach or pricing link for winter 2026–27.
Government Response
Deferred
HM Government
Deferred
The Warm Home Discount is a key policy in the Government’s approach to tackling fuel poverty and reducing the energy costs of low-income and vulnerable households in Great Britain. On 19 June 2025, the Government announced an expansion of the Warm Home Discount to give more eligible households £150 off their winter energy bills. This means all households on a qualifying means tested benefit will be eligible for the Discount from this winter. This brings around an additional 2.7 million households into the scheme, increasing the total number of households that will receive the discount this winter up to around 6 million. This will increase the coverage of fuel poor households from around 30% of total households in fuel poverty to around 45% this winter. We note that the Committee recommends that eligibility should be extended further, and the value of the £150 rebate should be increased. The Warm Home Discount Scheme is levy funded, meaning all consumers contribute to funding it. We must balance the needs of those most at risk of fuel poverty with the impacts on the bills of other consumers. Therefore, the value of the rebate has been maintained at £150 under the expansion. Whilst disability benefits are not means-tested and therefore, in themselves, not an indicator of having a low income, we estimate that approximately 40% of people in receipt of disability benefits are also receiving a means-tested benefit. Therefore, this winter’s expansion will ensure that those households receiving a means-tested benefit will be eligible for the Discount this winter. In September, we published a consultation, ‘Continuing the Warm Home Discount Scheme’ setting out our intention to continue support for those 6 million households into the next scheme period from 2026/27 to 2030/31 after current regulations end on 31 March 2026. This consultation closed on 20 November 2025. The Government will set out its response to the consultation in due course. During the next scheme period, we will explore improvements, both in terms of the level of support available and the reach of the scheme. Options might include providing additional support to households in fuel poverty (rated EPC band D or below), and/or a digital applications route that would enable support to be offered to low-income households who are currently excluded from the scheme. The aim of any such developments would be to enable the scheme to respond in a targeted fashion in future to the impacts of other policies and events, both positive and negative (for example, potential future energy price shocks or to accelerate progress towards meeting the objectives of the Fuel Poverty Strategy). Where proposed changes are significant, impact certain households, or have a material impact on the customer levy required, they will be subject to further consultation.