The Warm Home Discount is a key policy in the Government’s programme to tackle fuel poverty and the effects of rising energy prices on low-income households, irrespective of which payment methods households use. In the current scheme year (2021/22), we expect that over 2.2 million households will receive a rebate on their energy bills, and a total of over £3 billion of direct assistance has been provided to low-income and vulnerable households since the scheme began in April 2011. Energy suppliers generally issue rebate payments to prepayment meter customers by voucher. These vouchers can be redeemed by the customer to add credit to their meter.
The Government has committed to extending the Warm Home Discount to at least 2025/26 and expanding the spending envelope from the current £350m to £475m (in 2020 prices) per year, which will enable a further 780,000 households to access the scheme. We consulted last summer on reforms to the scheme that will enable the vast majority of rebates to be provided automatically, without customers having to apply. These reforms will make the scheme fairer, easier for eligible customers to access, and better targeted towards fuel poverty. We will publish the Government’s Response in the spring, with the reforms coming into force from the 2022/23 scheme year.