Warm Home Discount
The Warm Home Discount is an annual £140 payment to help those struggling to pay their energy bills.
Who gets the Warm Home Discount?
The Warm Home Discount is a compulsory scheme for the large energy companies and is an annual credit they pay into the electricity account of those who are eligible. Some small energy suppliers also offer it.
During winter 2019/20, the payment is £140. While this is a welcome saving, you should also make sure you're on the cheapest energy tariff for your home.
The Warm Home Discount applies to two groups:
The core group: if you receive the Guarantee Credit element of Pension Credit, you're in this group. In most cases, your energy supplier will identify you automatically and you won't need to apply for it.
The broader group: if you are on a low income or get certain means-tested benefits, you might qualify in this group. Each supplier has its own eligibility criteria, which are approved by the regulator Ofgem.
Is the Warm Home Discount only for pensioners?
No. Energy companies pay the Warm Home Discount to a broader group of people who have difficulty paying energy bills. Gas and electricity suppliers have a degree of discretion over which of their customers make up the broader group and how many to help, based on their market share.
The participating suppliers have had their own eligibility criteria approved by Ofgem and have a limit on the number of customers who can benefit. Consumers who may be eligible could include those on low incomes with a disability, people with long-term illnesses, parents with young children or those who get certain means-tested benefits.
Which energy companies pay the Warm Home Discount?
From 2019/20, all suppliers with more than 200,000 customers are legally obliged to offer the discount. These are:
Avro Energy, Bristol Energy, British Gas, Bulb Energy, Co-operative Energy (including Flow Energy and GB Energy), E, EDF Energy, Eon, Green Network Energy, Green Star Energy, Npower, Octopus Energy, OVO Energy (including Boost and Spark Energy), Robin Hood Energy (and all of its sub-brands), Scottish Power, Shell Energy, SSE, Utilita and Utility Warehouse.
If your supplier isn't listed, check with it whether it offers the Warm Home Discount.
Future changes to the Warm Home Discount
More smaller energy suppliers must start to pay eligible customers the Warm Home Discount, the government Department for Business, Energy and Industrial Strategy (BEIS) announced last year.
For the first time this winter, all energy firms with 200,000 or more customers must make the £140 payment to those customers who are eligible (see eligibility criteria above).
From winter 2020/21, energy suppliers with at least 150,000 customers must participate in the scheme.
The BEIS says it plans to review the scheme again in 2021 when the customer threshold for providing it ‘could continue to fall, potentially to zero’.
How to apply for the Warm Home Discount
Households in the core group should automatically receive the discount on their energy bill without having to take any action. You should get a letter confirming this, or telling you how to apply, if necessary. You should receive this letter between October and December 2019. The letter will say if you need to call a helpline to confirm your details. If it does, you will need to do this by 28 February 2020.
Payments are usually made during the winter months (by the end of March 2020, at the latest).
If you think you qualify in the core group but don't get a letter, contact the government's Warm Home Discount team on 0800 731 0214 (Monday to Friday, 8.30am to 4.30pm). The helpline is open from 14 October 2019.
Customers in the broader group will have to apply to their electricity supplier – check with it to find out the eligibility criteria. People with pay-as-you-go meters can also qualify for the discount.
Contact your energy firm as soon as possible if you are in the broader group. The numbers of discounts it can give are limited.
The Warm Home Discount will be applied to your electricity account. So if you receive gas and electricity from different suppliers, you should contact your electricity company to register. But if you get your gas and electricity from the same supplier, you can ask it to credit your gas account instead.
If I switch energy supplier, what happens to my Warm Home Discount?
If you switch away from a supplier that offers the Warm Home Discount to a supplier that doesn't, you'll lose your Warm Home Discount.
But some of the smaller suppliers could be cheaper for you overall, even when taking into account the value of the Warm Home Discount. So it's worth checking whether you will be better off.
If you qualify for the Warm Home Discount under the broader group with your current supplier and want to switch to another supplier, check first that you would still qualify under the criteria of your new supplier's broader group.
Again, take into consideration whether you could be better off by switching even if you were to lose the Warm Home Discount.