Thousands of households in the UK are set to benefit from a £150 credit issued by their energy provider during this month. Utilita has begun distributing the Warm Home Discount funds to smart prepay customers as of January 7, with plans to complete all payments by the end of January.
The Warm Home Discount, valued at £150, is directly credited to the electricity accounts of eligible households, rather than being provided as a cash payment. To qualify for this benefit, individuals must have been receiving specific benefits on the qualifying date, which varies annually.
Residents in England and Wales will automatically receive the Warm Home Discount, whereas those in Scotland will only receive it automatically if they receive the Guarantee Credit element of Pension Credit. For other eligible benefits, individuals must apply manually through their energy provider, as the scheme is not available in Northern Ireland.
The Department for Energy Security and Net Zero (DESNZ) has eliminated the requirement for high energy usage criteria for the Warm Home Discount in England and Wales. Previously, applicants had to demonstrate high energy costs to qualify, but this condition has been removed.
DESNZ estimates that the number of households benefiting from the discount could increase by 2.7 million, reaching an estimated total of 6.1 million households. Meanwhile, energy bills have recently risen, with the Ofgem price cap for a typical dual fuel household paying by direct debit increasing from £1,755 to £1,758.
Consumers on a standard variable rate tariff are covered by the Ofgem price cap unless they have a fixed-rate deal. While there is a cap on the charges for gas and electricity units, the total energy bill is still based on consumption. The Ofgem price cap sets limits on gas and electricity unit charges, as well as standing charges, fixed daily fees for energy network connection.
The price cap figure represents the expected annual payment for someone with average energy consumption.