Chancellor John Healey is reportedly considering raising the Warm Home Discount to £250 at the Budget later this month, a move that would benefit around six million low-income households across the UK. The discount currently stands at £150 and is applied to energy bills rather than paid as cash.
According to the Guardian, Healey could announce the increase at the Budget on October 28. The boost is intended to help the poorest households cope with cost-of-living pressures, particularly amid gloomy reports of significant energy bill increases expected from the new year.
How the Warm Home Discount works
The Warm Home Discount is applied either as an energy credit or as top-up vouchers, rather than as a cash payment. The effect is to reduce gas and electricity bills, putting more money into recipients' pockets and giving households breathing space over the winter period.
The scheme opened again at the start of October, though most households usually have to wait until between November and January for the discount to be applied to their bills. The Government states: "The Warm Home Discount Scheme is a one-off £150 discount off your electricity bill. If you’re eligible, your electricity supplier will apply the discount to your bill. The money is not paid to you."
Who qualifies for the discount
People qualify for the Warm Home Discount if they claim Universal Credit, Housing Benefit or Employment and Support Allowance (ESA). Pensioners on the Guarantee Credit part of Pension Credit are also eligible, alongside some of the poorest pensioners.
The Government adds: "You’ll usually get the discount automatically if you’re eligible. You may be able to get the discount on your gas bill instead if your supplier provides you with both gas and electricity and you’re eligible. Contact your supplier to find out."
Impact of the proposed increase
If confirmed, the increase from £150 to £250 would represent a 66.7% rise in the value of the discount. This would provide additional financial relief to the approximately six million households that currently qualify for the scheme, helping them manage energy costs during the coldest months.
The potential announcement comes as part of broader measures being considered by the Government to address cost-of-living pressures. The Budget on October 28 will reveal whether the increase is confirmed and what other support may be available to households facing rising energy bills.
