Millions of households in the UK are now receiving notifications regarding a one-time £150 reduction on their electricity bills starting today. These communications provide details about the Warm Home Discount scheme, which is once again open for applications. Eligible recipients receive a direct £150 deduction on their electricity bill, with the payment being sent to their energy provider.
The discount is typically applicable from late October to March and is accessible to households where someone was receiving specific benefits on the qualifying date, which varies annually. This year, the qualifying date is August 24, and individuals must have been claiming the qualifying benefits on that date to receive the Warm Home Discount this year.
Residents in England and Wales automatically receive the Warm Home Discount, while in Scotland, automatic payment only applies if the individual receives the Guarantee Credit element of Pension Credit. For other eligible benefits, manual application through contacting the energy supplier is necessary. Notably, there is no Warm Home Discount scheme in Northern Ireland.
The Department for Energy Security and Net Zero (DESNZ) announced the removal of the high energy use requirement for the Warm Home Discount in England and Wales. Previously, demonstrating high energy costs was necessary for benefits other than Pension Credit, but this condition has been eliminated.
DESNZ estimates that the number of households eligible for the discount could increase by 2.7 million, reaching an estimated total of 6.1 million households. In light of recent increases, energy bills have risen again, with the Ofgem price cap climbing from £1,720 to £1,755 for a standard dual fuel household paying via direct debit.
The current price cap remains effective until December 31, after which it will be revised. Consumers on a standard variable rate (SVR) tariff are covered by the Ofgem price cap unless they are under a fixed-rate agreement. While there is a price cap in place, the total amount paid for energy usage is still based on individual gas and electricity consumption.
The Ofgem price cap dictates the maximum charges for gas and electricity units along with fixed daily standing charges for energy network connection. This figure represents the anticipated annual cost for an average household consuming 2,700 kWh of electricity and 11,500 kWh of gas over a year.