Warm Home Discount (England and Wales) Regulations 2026

Baroness McIntosh of Pickering Excerpts

Monday 23rd March 2026 Grand Committee

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, these regulations were laid before this House on 2 February 2026. The warm home discount scheme has been a key policy in the Government’s approach to tackling fuel poverty and reducing the energy costs of low-income and vulnerable households, ever since its inception in 2011. Last year the Government expanded the scheme, removing the high cost to heat threshold to ensure that around an additional 2.7 million of the poorest households across Great Britain received a £150 rebate off their energy bills this winter, with nearly 6 million households now eligible. The current scheme period ends on 31 March 2026, and new regulations are required to continue the scheme beyond this date.

In September we consulted on continuing the warm home discount scheme up to and including the winter of 2030-31. The consultation respondents, including consumer and advocacy groups, charities and industry, strongly supported proposals to continue the scheme, and to continue to provide rebates via automatic data matching. Today we are discussing these regulations, as well as some additional changes to the scheme, which allow eligible households across England and Wales in or at risk of fuel poverty to continue to receive the rebate for the rest of this decade.

These regulations will extend the scheme in England and Wales for five more years from 2026, until they expire in 2031. The regulations will continue to oblige energy suppliers with more than 1,000 domestic accounts to participate in the scheme. These regulations will ensure that, as is the case currently, energy suppliers with fewer than 1,000 domestic accounts can choose to participate voluntarily in the scheme.

Under the scheme, participating energy suppliers are obliged to provide support to eligible households through a rebate provided directly to their energy bill, valued at £150. Eligibility for the rebate will continue to be set out by the Secretary of State with an eligibility statement, which is published for each scheme year. Following the removal of the high cost to heat threshold and the expansion of the scheme in 2025-26, the Government have committed to maintaining the current eligibility for the rebate in England and Wales, based on receipt of means-tested benefits, for a further five years.

Eligibility for the scheme remains unchanged but these regulations introduce a more streamlined approach to administration, without impacting eligibility. The existing core group 1 and core group 2 will be merged into one core group in England and Wales, with a view to enabling clearer communication and messaging to potentially eligible households. This change was broadly supported by consultation respondents.

We put out a range of communications ahead of and during each scheme year to eligible households, and will continue to do so for the next scheme period. The automatic data-matching process for the core group in England and Wales will continue, using data held and processed by the Department for Work and Pensions, with the majority of eligible households—typically around 96%—expected to be automatically data-matched, meaning that they will receive the rebate without taking any further action.

These regulations set out a range of permitted activities, overseen by Ofgem, through which energy suppliers can deliver towards their non-core obligation of supporting eligible households in fuel poverty or in a group that are at risk of fuel poverty. Permitted activities within industry initiatives include benefit entitlement checks, energy-efficiency measures, energy advice, debt relief and financial assistance payments of £150. Scheme energy suppliers can also choose to dedicate non-core spend towards the park home scheme, which provides eligible households with £150 of support towards their energy bill.

The regulations also introduce changes to the administration of the scheme and enhance consumer protections for eligible households. They include a new provision to enable the Secretary of State to direct suppliers to communicate directly with their own successfully data-matched customers to provide further information about the scheme, including information related to automated decision-making. In addition, the regulations will replace fixed spending targets with annual estimates, based on the number of eligible households expected to benefit from a rebate each winter, to better predict scheme costs.

Tackling fuel poverty is a priority for this Government. We recognise that too many people cannot afford to heat their homes at a reasonable cost. That is why in January we published our new fuel poverty strategy, alongside our Warm Homes Plan, to ensure that many more fuel-poor households are protected by 2030. Through these regulations, the warm home discount scheme will continue to provide vital support for eligible households each winter at the coldest time of year when support is most needed. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank the Minister for introducing these regulations, which I broadly support. I declare my interest as the honorary president of National Energy Action, from which I am delighted to have had a written briefing.

I have a question for clarification at the outset. A piece on the Government’s website titled “Help with the cost of living in 2026” talks of

“an average of £150 off the costs of energy bills”.

It goes on to say:

“This support is on top of the Warm Home Discount Scheme—a one-off £150 discount off your electricity bill—a total package of £300”.


Do people have to apply separately for the £150 off the cost of living and for the £150 from the warm home discount scheme? The figure cited in the regulations, by the Minister and on the GOV.UK webpage is £150. From memory, I thought the figure for the warm home discount scheme was £350. If that is the case, £350 to help those most in need because they are suffering the most from fuel poverty will obviously go a lot further than £150. I do not know whether that is an erroneous memory on my part, but that is what I remember.

The NEA is concerned—this is my wording, not the NEA’s—about one potential consequence of the regulations. The idea is to lift 1 million homes out of fuel poverty, setting new standards for landlords to meet to help do so. However, as we saw with a recent Bill, whose name I forget, under which landlords were meant to improve housing, in fact they sold it because they simply did not have the means to upgrade it. Does the Minister share my concern that instead of rented properties being upgraded at the cost of the landlord or, potentially, with the help of the Government, the landlords may not have the means to do so and therefore the rented properties will go off the market? That is a very real concern.

Is any attention being focused on rural areas? My experience, having been in the European Parliament and represented two separate constituencies in the House of Commons, is that homes in rural areas tend to be less well insulated and more isolated. It is more expensive to heat a house than a flat. Is any particular attention being given to rural areas in that regard? That could make a real difference to reducing fuel poverty.

National Energy Action has a good record on giving advice and doing what it calls hand-holding to guide people through the system; I commend it for doing this. I like to think that I am moderately intelligent but, if I have difficulty in understanding the system, I can understand how tenants and others who wish to apply for the scheme may need help. Have the Government considered offering such help to those who are hopeful of benefiting from the warm home discount—and, indeed, from the cost of living reduction?

Are the Government planning to address the vexed issue of standing charges on energy bills? I know that this is a great theme of the energy champion, Martin Lewis. I never manage to watch his programme because we always seem to be voting here when it is on, but in my experience this is the only utility where the customer is paying up front for the infrastructure to be put in place. Normally, with telecoms and broadband, the customer pays for the infrastructure after it is in place.

The point that I would like the Government to consider is this: all of us can, as consumers, control our unit costs by using less power—that is, less electricity and less gas—and reducing our consumption in that way, but we have absolutely no control over the standing charge. When I go on to Uswitch, I see that it is creeping up: it was 40p per day last year but, this year, it is 50p or 60p per day. We have seen that energy bills are projected to come down from April for three months, but, given the backdrop of the Middle East, there is now an expectation that, if not from July then certainly from the next increase in September or October, people will face the very real issue of finding that they cannot control their household bills.

Finally, National Energy Action refers to the debt mountain. A growing number of households are averaging debt balances exceeding £1,200 a year. This is posing real problems for them. They are paying for last year’s electricity use before they have even saved up for next year’s electricity use. In the words of the NEA, many are trapped in a cycle of paying for last winter’s energy alongside current usage, often with no formal repayment arrangement in place. Are the Government looking at the possibility of trying to address this issue?

In conclusion, as I say when I have already used up all my “finally”s, can the Minister use his good offices to ensure that the warm homes plan is embedded not just in his department’s work but in the 10-year health plan, to make sure that this issue is reflected in health—older people can become unwell if they are not able to heat their houses properly—as well as in the new child poverty strategy, to make sure that there is completely joined-up government at this level? Otherwise, I like the regulations.

[Lord Jones (Lab)]

My Lords, it is always instructive to follow the noble Baroness. I thank the Minister for his shrewd analytical introduction and his insight. Tangentially, for me, it conjured up memories of chilblains, hot-water bottles and ice on the inside of the windowpanes—the considerable discomforts of a post-war Britain barely out of the VE Day and VJ Day celebrations. It was an era of greyness, rationing and lengthy bus queues—not to mention the frequent and unannounced power station electricity cuts in our ever-cold homes.

These regulations aim to help some 6 million households, with the best part of £1 billion of state money going to fellow citizens. The Minister might be pleased and these regulations are surely to be welcomed in these most uncertain times. Can he say how many Welsh households are in receipt of such moneys? It is the case that Wales is a place of low wages and unusual weather patterns.

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[Lord Whitehead (Lab)]

I thank noble Lords for their valuable and apposite contributions to this debate. They were quite extensive. I will do my best to respond to them, but if I miss anything I will be happy to write to noble Lords.

One particularly important element of this scheme, alluded to by a number of noble Lords, was data and data matching. One of the good things about this programme is that with data matching now as efficient as it is—as the noble Earl, Lord Russell, mentioned—probably 90% of an expanded group of potential recipients can be automatically data-matched. That is, they will not have to do anything more to receive their rebates because they have fallen into a matched category automatically. But 2% is not an insignificant amount. The Government are determined to continue to notify people who are deemed unmatched to contact the warm home discount helpline to determine their eligibility.

On data matching in general, with the actions that the Government are taking in some different areas, it is likely that data matching will become even more efficient. Indeed, the Government are actively pursuing a programme called Kickstarter to analyse how data matching across departments could become more efficient and effective in future.

Noble Lords, in particular the noble Baroness, Lady McIntosh, asked about what money counts as what for this relief. The £150 targeted as coming off energy bills—not that energy bills will not rise but that they will be £150 less than they might otherwise be—has been substantially discharged as far as the changes to legacy charges from levies to the Treasury, causing a £117 reduction in average energy bills next year. That is in addition to the £150 that will automatically go to 6 million households now through this measure. Of course, the funding that has recently gone into the cost of heating oil, particularly in rural areas and off-grid properties, is in addition to all that as well. These are not cross-cutting reductions or rebates: they are all piling up on top of each other.

[Baroness McIntosh of Pickering (Con)]

I hear what the Minister says, but £117 is obviously not £150. The Cabinet Office’s website—not that of the Minister’s own department—is clearly inaccurate because it leads you to believe that you might get £150 plus another £150, making a total of £300. I am grateful to the Minister for taking the time to explain that that is no longer the case, but I believe that web page should be updated.

[Lord Whitehead (Lab)]

I am delighted to tell the noble Baroness that I cannot speak for the Cabinet Office’s website, but I take her point that these things need to be clarified as much as possible.

The noble Baroness also asked about standing charges, both generally and in relation to this particular measure. She will be pleased to know that we have announced our intention to move warm home discount costs from the standing charge to the unit rate; Ofgem has confirmed that this charge will be included in the price cap from 1 April 2026. That will offer a cleaner and more accurate basis of cost recovery while addressing widely raised concerns around standing charges. It does not overcome the overall question of whether standing charges should exist at all. Obviously, that is a wider question for review of standing charges and how they impact on the costs of energy in general.

The noble Baroness, Lady McIntosh, the noble Earl, Lord Russell, and the noble Lord, Lord Moynihan, also mentioned debt. That is an important issue, because each consumer pays around £52 a year towards the cost of managing and writing off debt. If the debt were to become unsustainable, it would place an even higher cost on consumers, so we are working urgently with Ofgem to drive debt out of the energy system alongside delivering reforms that put people first. Ofgem has published an updated debt strategy, setting out its near-term actions and priorities to support suppliers to reduce the level of debt in the sector and subsequently lower the cost of managing this for consumers, lowering that £52 a year that is being paid. That includes proposals for a debt relief scheme to tackle debt built up by some consumers during the energy crisis.

Noble Lords mentioned the disproportionate impact of fuel poverty in rural areas and asked whether any additional measures were being looked at on that. This issue is very pertinent in Wales, as a larger number of people are off-grid and in fuel poverty than in England. I am pleased to inform noble Lords that about 300,000 Welsh households will benefit from this expanded scheme, a substantial increase from previously. As far as rural fuel poverty is concerned, some of the additional measures that can be undertaken by energy firms as part of the overall scheme are relevant to making sure that people who are in fuel poverty and in rural areas, and who have higher costs, are adequately addressed.

Noble Lords also asked about the adequacy of the £150. Certainly, the Government will keep that under close review, but we have taken the view that it is £150 for 2026-27, partly because of the substantial expansion of the scheme, how that indirectly falls on customers as a levy and how that can be sustained. The suggestions put forward this afternoon have certainly been heard and are well received, and we will keep those issues under close review.

I hope I have covered most of noble Lords’ points but, as I said, if I get back to my office and realise that I have completely missed a key point, I will try to make up for it by communicating with the particular noble Lord or noble Baroness at the earliest opportunity.

Tackling fuel poverty is a priority for this Government and the views expressed underline how critical it is that we continue to tackle it.

[Lord Whitehead (Lab)]

I apologise to the noble Lord. I am afraid I did not address that question directly, but the privacy notice for the warm home discount is published on the GOV.UK website, where it can be easily accessed. That privacy notice is in line with those from other areas of government with regard to the privacy of people whose data is being shared.

[Baroness McIntosh of Pickering (Con)]

When this used to be debated next door, there was a real issue of the DWP not being able to share data, so that those potentially most at risk of fuel poverty could not be identified. Has that problem been resolved now? If the noble Lord is not familiar with it, could he take this issue away and let us know? That would be very helpful.

[Lord Whitehead (Lab)]

Yes, I am happy to take that away. I am aware that, although great strides have been taken in recent years in allowing data sharing to work efficiently across different departments and make sure that people do not keep filling in the same form over and over again, there are still deficiencies in this area. Indeed, the noble Baroness will recall that, when she and I were Members of Parliament many years ago, it seemed virtually impossible that this problem would ever be resolved. We have come a long way in making sure that it works properly now, with the right safeguards in place.

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[Lord Whitehead (Lab)]

I will have to write to the noble Lord on that because I do not have paragraph 5.3 in front of me. I will certainly send him a letter to that effect.

In essence, this SI is a method of making sure that a much larger group of people receives the discount than has hitherto been the case, which is vital at this time of very high energy prices. It is about making a real impact on fuel poverty and continuing to expand that impact with the measures in the new scheme. It will be done on an affordable and manageable basis and in conjunction with the Warm Homes Plan, which, as the noble Baroness will know, is about driving down bills through energy efficiency and various other measures in homes. Together with those measures, this will make a real impact on fuel poverty over the next period. I urge noble Lords to support the new scheme, which we will have at least until 2030, subject to review. I hope we will see a substantial uptick in people’s warmth and energy welfare in that period, thanks to what is before us this afternoon.

[Baroness McIntosh of Pickering (Con)]

I am happy that the Minister will write to us, but I do not think he replied to one question. Does he share my concern that many landlords may feel that they cannot afford to do what we are asking them to do with the warm home discount and in the Warm Homes Plan, so they will sell their properties, which will then come off the market?

[Lord Whitehead (Lab)]

What we are asking landlords to do under the Warm Homes Plan is an extension of some of the work done to uprate properties from band E, whereby landlords could put some money, with some exemptions, into improving their properties for rent. The limit that landlords can put in before being exempted is, I think, about £10,000, but it means a higher level of warmth and efficiency in the home. There is no evidence that large numbers of landlords went out of business or sold their homes under the last scheme in operation, and we are confident that that will not be the case on this occasion.