Warm Home Discount

Page type: primary-anchored (mirrors WHD (England and Wales) Regulations 2022, SI 2022/772)

Source file: whd.md

Last updated: 2026-04-05

What this instrument does

The Warm Home Discount is a fuel poverty programme that gives eligible low-income and vulnerable households a GBP 150 annual discount on their energy bills. It is funded by energy suppliers (who recover the cost from all customers) and administered by Ofgem (GEMA) and DESNZ. The scheme has been running since April 2011 and currently operates under the WHD (England and Wales) Regulations 2022 (SI 2022/772), which cover scheme years 12-15 (2022/23 to 2025/26). A parallel set of regulations covers Scotland (SI 2022/1073).

The legal basis is the Energy Act 2010, sections 9, 10, 14, and 31(5)-(6).

How it works

The deal for customers

Eligible households receive a GBP 150 annual discount, applied directly to their energy bill (electricity or gas account) or provided as a pre-payment credit. Most recipients are identified automatically through government data matching and do not need to apply.

Who pays

All domestic energy customers pay for the scheme through their bills. At current scale, the cost is approximately GBP 22 per year for a typical dual-fuel household. Suppliers with 1,000 or more domestic customers must participate (Reg 6). The cost is redistributed between suppliers proportionate to market share via a reconciliation mechanism (SI 2022/1162).

Who is eligible (Regs 8-10)

Core Group 1 (Reg 9)

Pension Credit Guarantee Credit recipients. Identified automatically by the Department for Work and Pensions (DWP). These customers receive the rebate without applying. This covers approximately 1 million pensioners.

Core Group 2 (Reg 10)

Low-income households with high energy costs. Identified through a data matching process that combines: - Property data from the Valuation Office Agency (VOA) -- identifying expensive-to-heat homes - Means-tested benefits data from DWP and HMRC

Qualifying benefits: - Income-related Employment and Support Allowance (ESA) - Income-based Jobseeker's Allowance (JSA) - Income Support - Universal Credit - Housing Benefit - Child Tax Credits / Working Tax Credits - Pension Credit Savings Credit

The "high cost to heat" property filter means that not all benefit recipients qualify -- only those whose property is assessed as expensive to heat. A February 2025 consultation proposed removing this filter, which would approximately double the number of eligible households.

Industry Initiatives (Regs 21-24)

Beyond the direct rebate, suppliers must fund activities to help fuel-poor customers, including: - Benefit entitlement checks and claiming assistance - Energy efficiency and thermal efficiency measures - Boiler and central heating installation (must be TrustMark-registered, Schedule 2) - Energy advice provision - Debt write-off (maximum GBP 2,000 per customer per year) - Bill payment assistance (maximum GBP 150 per customer per year for specified household types)

Funding envelope (Schedule 1)

The aggregate non-core spending obligation (which covers the total scheme cost) is set by the Secretary of State:

Each compulsory supplier's share is their "obligation percentage" -- proportional to their share of the domestic market.

Supplier obligations

Who must participate (Reg 6)

The drop from 50,000 to 1,000 captured nearly all licensed electricity suppliers. Smaller suppliers may participate voluntarily in core group elements.

Spending caps on non-core activities (Reg 20)

Scale

At scheme year 13 (2023/24), the WHD delivered: - ~3.4 million rebates to households across GB - GBP 44.3 million on 59 Industry Initiatives (SY12 figure) - Average bill impact of ~GBP 22/year per dual-fuel household

England and Wales vs Scotland

The WHD operates under separate regulations in each jurisdiction:

Proposed expansion (2025 consultation)

In February 2025, DESNZ consulted on expanding the scheme for winter 2025/26:

Key change: remove the "high cost to heat" property threshold for Core Group 2, making all means-tested benefit recipients eligible regardless of their property type.

A draft WHD (England and Wales) Regulations 2026 has been debated in the Lords (23 March 2026), confirming the scheme will continue beyond its current March 2026 expiry.

Legal architecture

Energy Act 2010, ss.9, 10, 14
  --> WHD (England and Wales) Regulations 2022 (SI 2022/772)
      --> Core spending (GBP 150 rebate)
      --> Non-core spending (industry initiatives)
  --> WHD (Scotland) Regulations 2022 (SI 2022/1073)
      --> Core Group + Broader Group
  --> WHD (Reconciliation) Regulations 2022 (SI 2022/1162)
      --> Cost redistribution between suppliers
  --> Administered by Ofgem (GEMA) and DESNZ
  --> Data matching: DWP + VOA + HMRC

Cross-references

Defined terms

See the canonical source file for the full defined terms register.

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