Millions of households in the UK are set to benefit from a £150 reduction on their electricity bills this winter as part of an annual assistance program. The Warm Home Discount scheme has been relaunched, offering a direct £150 deduction on electricity bills, which is applied through the energy supplier rather than as a cash payment to the individual’s bank account.
Participating energy suppliers are part of the Warm Home Discount scheme, with specific eligibility criteria based on benefits claimed on the qualifying date, which for this year is August 24. Residents in England and Wales automatically receive the discount, while in Scotland, automatic payment is contingent on receiving the Guarantee Credit element of Pension Credit. Those qualifying for other benefits need to apply manually through their energy supplier, as the scheme is not available in Northern Ireland.
Additionally, energy consumers should be aware of a slight increase in energy bills in January, with the Ofgem price cap rising from £1,755 to £1,758 for a typical dual fuel household paying by direct debit. The price cap will remain effective until March 31, primarily benefiting those on standard variable rate tariffs. However, the Ofgem price cap does not impose a total limit on energy costs, as bills are calculated based on actual energy usage.
The Ofgem price cap determines the maximum charges for gas and electricity units, including standing charges that are fixed daily fees for energy network connection. The cap is indicative of the expected annual costs for an average household consuming a specified amount of electricity and gas over a year.