Millions of households in the UK have begun receiving notifications regarding a one-time £150 reduction on their electricity bills starting today. The correspondence provides details about the Warm Home Discount scheme, which is reopening. Under this scheme, eligible households can benefit from a £150 direct deduction on their electricity bill, with the payment facilitated through their energy provider.
Typically, the discount is applied between late October and March and is accessible to households where a member was receiving specific benefits on the qualifying date, which varies annually. This year, the qualifying date is August 24, and to qualify for the Warm Home Discount, individuals must have been receiving one of the specified benefits on this date.
Residents in England or Wales will automatically receive the Warm Home Discount, while in Scotland, automatic payment is only applicable to those receiving the Guarantee Credit element of Pension Credit. For other qualifying benefits, manual application through contacting the energy supplier is necessary, as the Warm Home Discount scheme is not available in Northern Ireland.
The Department for Energy Security and Net Zero (DESNZ) has announced the removal of the high energy use requirement for the Warm Home Discount in England and Wales. Previously, individuals had to demonstrate high energy costs to qualify for benefits other than Pension Credit, but this condition has been eliminated.
DESNZ estimates that the number of households benefiting from the discount could increase by 2.7 million, reaching an estimated total of 6.1 million recipients. In related news, energy bills have recently risen, with the Ofgem price cap for a typical dual fuel household paying by direct debit increasing from £1,720 to £1,755.
The current price cap will remain effective until December 31, after which it will be revised. Customers on a standard variable rate (SVR) tariff are covered by the Ofgem price cap unless they are on a fixed-rate deal. While there is no overall cap on energy costs, the Ofgem price cap limits the charges for gas and electricity units, along with fixed daily standing charges for energy network connection.
The Ofgem price cap reflects the expected annual payment for average energy consumption, assuming a household uses 2,700 kWh of electricity and 11,500 kWh of gas over a 12-month period.