Warm Home Discount: Millions more families to get £150 off energy bills this winter

Millions of UK families are set to get a £150 boost to pay their energy bills this winter. The government has revealed the expansion of the Warm Home Discount (WHD) - meaning 2.7 million extra households could be entitled to the benefit.

The change, which comes after the Labour administration’s recent U-turn over the Winter Fuel Allowance, increases the total number of households eligible for WHD to more than 6 million – including 900,000 families with children and 1.8 million households in fuel poverty.

Labour said the expansion - which now means all billpayers in receipt of means-tested benefits receive the £150 - is part of its Plan for Change, which has also seen the expansion of free school meals by 500,000 children, as well as more families entitled to 30 hours of free childcare.

It is welcome news for households, still struggling to tackle the cost of living crisis, and comes after four interest rate cuts four times, lowering mortgage costs, and Prime Minister Keir Starmer said it would make a “real difference”.

“I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill,” he said. “Providing security and peace of mind for working people is deeply personal to me as Prime Minister and foundational for the Plan for Change. I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.”

Energy Secretary, Ed Miliband, said: “Millions of families will get vital support with the cost of living this coming winter, demonstrating this government’s commitment to put money in people’s pockets through our Plan for Change.”

Elsewhere, the energy price cap - which sets the maximum charge for energy - is also set to fall in July and the Government said the changes mean families are able to plan for the winter with “certainty and peace of mind”.

The plan comes after the Government was forced to backtrack on a plan to scrap the Winter Fuel Allowance (WFA) for OAPs not receiving pension benefits after a fierce backlash among voters, instead installing a system meaning anyone with an income of, or below, £35,000 a year will receive the payment - some nine million people.

Elsewhere, the administration has backed a plan by energy regulator Ofgem to ease the burden on people who accumulated debt during the energy crisis between 2022 and 2024 - prompted in part by Russia’s invasion of Ukraine. Ofgem’s plan will cut consumers’ energy bills by reducing the cost of paying for energy debt.

Costs of expanding the WHD will be offset by efficiency savings across the energy system, the Government said, including a decrease in the operating cost allowance of the price cap for the average billpayer - which will bring bills down.

Ofgem plans to reduce the overall stock of consumer debt, currently recouped via a levy on all bills, will also bring savings to fund the WHD.

In response, National Energy Action Chief Executive Adam Scorer said: “It’s hugely positive that across Great Britain, all low-income households on means-tested benefits will get some direct support to tackle unaffordable bills and record energy debts this winter. Vitally, this includes many more low-income working-age households with children, who are living with the daily consequences of not having access to enough energy at home.

“These families are in dire need of more support - and so are many more who aren’t on means-tested benefits and aren’t getting any additional help Above all, we need to provide recipients with meaningful levels of direct help to reduce their energy bills and wider support.

“The Warm Home Discount is a lifeline for many vulnerable people National Energy Action work with, and it is good that more people will benefit. But the lifeline itself is frayed and far from sturdy.

“The rebate has only increased by a meagre £10 during a period in which energy bills have gone up by £500 a year and there is no clarity on the programme beyond the end of March next year. This announcement is good news for this winter, but the government needs to come up with a longer-term plan for providing deeper support in future for people who cannot afford a warm and healthy home.”