Almost 2m eligible low-income households ‘lost out on Warm Home Discount in 2020’

A new report found the fixed available budget and the ‘first come, first served’ nature of the scheme are the main reasons for a £325 million shortfall

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Nearly two million eligible low-income households miss out on £140 Warm Home Discount scheme this year.

That’s according to new research from comparison and switching service Uswitch, which suggests that was the result of the fixed available budget and the ‘first come first served’ nature of the scheme.

The Warm Home Discount is designed to tackle fuel poverty by providing low-income households with a £140 discount on their energy bills.

Elderly people on low incomes, who are known as the ‘core group’ of the scheme, automatically receive the discount.

People who receive income support or other allowances, known as the ‘broader group’, have to apply to their energy supplier during the summer months.

The discount is then applied to successful applicants’ bills between March and September.

The overall pot of money is £351 million this year and it is automatically provided to 1.1 million people in the core group, leaving funds for 1.2 million in the broader group.

However, the research estimates there is a £325 million shortfall between the amount of funds required and the amount available.

The Uswitch survey of 2,000 respondents also found nearly a third of consumers who could be eligible for the discount did not know the scheme existed and almost 56% of those in the broader group found the application process difficult.

Richard Neudegg, Head of Regulation at Uswitch.com, said: “The government is making the right noises on possible reforms to the Warm Home Discount, but these can’t come fast enough.

“Ten years on from its launch, both the first come first served nature of the scheme, and its fixed pot of money, look increasingly outdated. The pandemic has thrown this issue into even starker focus, with so many more people finding themselves on the energy breadline and struggling to pay their bills.”

A BEIS spokesperson said: “The Warm Home Discount scheme is providing vital support to those most at risk of a cold home. We have recently extended it and from 2022 it will reach nearly three million people and be worth £475 million a year.

“We are also examining how we can reform the scheme to provide more payments automatically, simplify the application process and reach the most vulnerable.”

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