At present, 2.2million households qualify for the Warm Home Discount, which gives a £140 discount on energy bills between October 2021 and March 2022 – but there are plans to open the criteria up further
Millions more struggling households could soon qualify for a discount on their energy bills to help with rising costs and inflation, under plans being put forward by the government.
At present, 2.2million households qualify for the Warm Home Discount, which offers a £140 reduction on energy bills between October 2021 and March 2022.
The scheme is partly automated, although households can apply themselves if they are at risk of falling behind on their bills.
The money is paid directly to suppliers – giving vulnerable people such as pensioners £140 off their winter bill.
Next year, the discount will rise by £10, and the eligibility criteria will cover an additional 800,000 homes, meaning three million homes will qualify.
However, it is now understood that the energy discount could be made more generous sooner to target those on the lowest incomes and the most at risk of falling behind due to rising inflation.
No final decisions have been made, but the mechanism is viewed in Whitehall as neatly encapsulating all the people that Boris Johnson wants to help with targeted support.
Yesterday, the Prime Minister’s spokesman insisted he was “not aware of any further changes” to help keep energy prices down, but acknowledged: “Obviously we keep it under review, we are listening to those most affected.”
On Tuesday, Mr Johnson dismissed calls to axe VAT on energy bills to help household finances – despite his own manifesto pledge to scrap it.
The Prime Minister said: “The difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it”.
However, twice yesterday, he namechecked the Warm Home Discount in the Commons in response to pressure about rising living costs during Prime Minister’s Questions.
Scrapping the VAT rate would knock around 5% off the average bill – meaning a typical household spending £1,277 a year on energy – the currently price cap level – would save around £63.85.
That would be even higher from April, as predictions suggest energy bills could rise by more than 50 per cent for those on a standard tariff when the new price cap takes effect.
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Households are facing a cost of living squeeze, with inflation set to reach highs of 6% this spring.
At the same time, Chancellor Rishi Sunak is under pressure to suspend a rise in National Insurance tax from April – when many inflation rises will take effect.
The new cap, which will be announced on February 7 and come into force on April 1, is certain to increase from the current £1,277, itself a record, with analysts and trade body Energy UK predicting the new figure will be around £2,000.