A new report released today warns a scheme which provides a payment of £140 towards energy bills – the Warm Home Discount (WHD) – could end in March 2021, despite it providing a lifeline to millions of pensioners across Great Britain.
The authors also highlight that up to two million working age households across Great Britain could already be missing out on the energy rebate each winter, leading to difficulties keeping homes at a safe temperature.
National Energy Action (NEA) and Fair By Design (FBD) have teamed up to call for an extension and expansion of the scheme to ensure all eligible low income working age households receive the rebate automatically without needing to apply each year to their supplier.
Peter Smith, Director of Policy and Research at NEA commented:
For nine years the Warm Home Discount scheme has been hugely successful in ensuring that the most vulnerable pensioners receive vital rebates automatically and are better able to afford to keep their homes adequately warm over winter.
It’s crucial this continues. Legislative powers were also passed in Parliament three years ago which allow the Government and suppliers to provide this support automatically to working age households too but up to two million Brits are missing out on £140 energy rebates each year.
This is despite them being eligible for support and paying for the cost of the policy through their energy bills.
NEA and FBD say most poorer customers miss out each year because the Warm Home Discount is poorly advertised which means many are unaware of its existence. And even when customers are aware and apply, their applications can be unsuccessful because there is only a finite amount of money available for the limited annual budget. Smaller suppliers are also not required to provide the WHD meaning some customers switch suppliers in order to benefit from a cheaper deal but end up losing their entitlement to the £140 rebate making them worse off.
Carl Packman, Head of Corporate Engagement at Fair By Design said:
Many low income households are already compelled to make a choice nobody should have to make: to heat or to eat. At the same time many pay a poverty premium for the way they pay for household heat, which makes that desperate situation even worse.
The Warm Home Discount is a lifeline for many struggling to heat their homes, to levels many of us take for granted. But there is a risk the scheme will end in March 2021.
Putting £140 back in the pockets of millions of working age people will mean they pay a fair price for their energy. It mustn’t be underestimated just how valuable this measure will be.
NEA and FBD are calling for Government to extend and expand the Warm Home Discount scheme for at least three years and ensure smaller suppliers are also required to provide the WHD. Current powers within the Digital Economy Act allow Government to ensure that all those eligible for the WHD rebate actually receive it without reducing benefits for low income pensioner recipients who are most risk of dying over winter.
WHD Industry Initiatives also fund the work of community and voluntary organisations to deliver assistance with debt and energy advice. Without a commitment to the extension of this element of the scheme NEA and FBD have warned that this work will cease.
NEA and FBD’s full briefing highlights how this can be achieved in a cost neutral way. Smith concludes:
We hope the UK Government, Ofgem, parliamentarians, and energy companies work together in 2020 to ensure that the scheme continues and expands after 2021.