Independent Age has urged Prime Minister Andy Burnham to increase the Warm Home Discount from £150 to £400 after announcing a cut to electricity bills by scrapping VAT.
The charity welcomed the UK Government's decision to remove the five per cent VAT charge from domestic electricity bills for six months from October 1, a move expected to reduce the typical annual energy bill by around £45. However, it said the measure should be seen as only the first step in helping older people struggling with the cost of living and called on the UK Government to introduce more targeted support before winter.
The charity said the UK Government should now go further by increasing the Warm Home Discount to £400 and introducing a social tariff to help households on the lowest incomes.
Charity's call for further action
Joanna Elson, chief executive of Independent Age, said: "Today's VAT cut to electricity bills is an important and welcome acknowledgement that immediate action is needed to drive down energy costs."
"We hope the removal of the five per cent VAT charge from October - reducing the typical annual bill by around £45 - signals the start of sustained action by the new Prime Minister to ease the relentless financial pressures on older people living on low incomes."
"We are already hearing from older people on low incomes who are rationing their energy use or cutting back on the essentials, and that's before the winter months take hold when energy use increases."
Ms Elson added: "If Andy Burnham is to make good on his pledge to ease the cost of living pressures and help millions of older people living in poverty, we urge him to go further and lead his government to increase the Warm Home Discount from £150 to £400 without adding the cost to energy bills and develop a more comprehensive energy social tariff for people of all ages on low incomes."
Warm Home Discount scheme details
The Warm Home Discount provides eligible households with money off their electricity bills during the winter months. The scheme has recently been extended until at least March 2031, with major changes expected to see hundreds of thousands more households across Scotland receive the payment automatically.
Under the revised system, an estimated 345,000 Scottish households are expected to qualify automatically for the rebate from winter 2026/27 - around 250,000 more than under the previous arrangements. Overall, around 560,000 Warm Home Discount payments are expected to be made across Scotland each winter under the expanded scheme.
The payment is currently worth £150 and is applied directly to electricity bills for eligible households, including many people receiving the Guarantee Credit element of Pension Credit. Some households receiving other means-tested benefits may also qualify depending on their income, energy costs and property information.
Government's VAT announcement
The charity's intervention comes a day after Mr Burnham announced the temporary removal of VAT from domestic electricity bills, describing the measure as part of efforts to give households "breathing space" as they continue to face cost of living pressures. The VAT cut will take effect from October 1 for six months and is expected to reduce bills by around 4.8 per cent, although consumer champion Martin Lewis has warned that any savings could be offset if Ofgem increases the energy price cap this autumn.
