Energy price cap: proposed changes to Warm Home Discount Scheme cost allowance

Energy price cap: proposed changes to Warm Home Discount Scheme cost allowance | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Energy price cap: proposed changes to Warm Home Discount Scheme cost allowance Publication type: Consultation Publication date: 24 October 2025 Last updated: 21 November 2025 Closed date: 8 November 2025 Status: Closed (with decision) Topic: Energy pricing rules Subtopic: Energy price cap Scheme name: WHD Show all updates Print this page Related links Energy price cap Policy Update: Warm Home Discount and Contracts for Difference Share the page Share on Facebook Share on Twitter Share on LinkedIn Outcome of our consultation on changes to the Warm Home Discount cost allowance in the energy price cap from 1 January 2026 to 31 March 2027 following expansion of the scheme. Details of outcome We have decided to change the cost profile of the Warm Home Discount cost allowance in the energy price cap from 1 January 2026. To reflect the increased costs of the expanded Warm Home Discount scheme, we have decided to bring the remaining cost recovery associated with the WHD scheme year 2025 to 2026 expansion forward to 1 January 2026. We have also decided to extend these costs over a longer period until 31 March 2027. The decision document attached below sets out the rationale behind our chosen approach following the feedback we have received during the consultation. Read the full outcome Energy price cap proposed changes to Warm Home Discount Scheme cost allowance decision [PDF, 162.55KB] Energy price cap proposed changes to Warm Home Discount Scheme cost allowance consultation responses [ZIP, 1.38MB] Original consultation We are proposing changes to the cost profile of the Warm Home Discount cost allowance in the energy price cap from 1 January 2026. This proposal follows the UK government decision to expand the Warm Home Discount Scheme half way through the financial year 2025 to 2026. This is to make sure that an extra 2.7 million eligible households get support they need to help with the cost of their energy bills. The UK government is also proposing to extend the Warm Home Discount Scheme after April 2026. To reflect the increased cost of the expanded scheme we are proposing to bring the remaining cost recovery associated with the financial year 2025 to 2026 expansion forward to 1 January 2026. We are also proposing to extend these costs over a longer period until 31 March 2027. Background The Warm Home Discount scheme provides a £150 annual rebate on energy bills to support low-income and vulnerable households. There are different costs included in the energy price cap. A cost allowance to reflect the costs to suppliers of delivering the Warm Home Discount scheme is one of them. This allowance enables energy suppliers to recover the costs they incur in providing rebates to eligible customers. Who should respond We would like views from people with an interest in the level of the energy price cap. We particularly want to hear from: energy suppliers energy consumers industry groups consumer groups charities Consultation document Warm Home Discount Oct 2025 consultation [PDF, 208.46KB] Print this page Related links Energy price cap Policy Update: Warm Home Discount and Contracts for Difference Share the page Share on Facebook Share on Twitter Share on LinkedIn All updates 21 November 2025 added outcome of consultation. Close