The Department for Work and Pensions (DWP) is sending letters to six million households between October and December about a £150 Warm Home Discount energy bill rebate. The letters will either confirm that the recipient will receive the amount off their bill or invite them to call a helpline to check eligibility.
Scheme extended to 2031
The Government announced in January that the scheme would run for the remainder of the decade, guaranteeing qualifying households receive the £150 rebate on energy bills each winter until 2031. Those entitled to the discount should receive the credit before March 31 next year.
In England and Wales, there is no requirement to apply for the scheme, though households may be asked to contact the Warm Homes Discount helpline to verify certain details. In Scotland, customers should determine whether they need to apply through their supplier's Broader scheme or will automatically receive it under the expanded Core Group.
Scam warning and eligibility expansion
Neither the Government nor energy regulator Ofgem will contact households requesting bank details, and people are advised to be wary of clicking links in suspicious emails and text messages. Nearly three million families were brought into the scheme last year, with the total number of qualifying households increasing to approximately six million, according to the DWP.
Former energy secretary Ed Miliband said the extension showed the Government was prioritising Britain's "affordability crisis" and that the Warm Home Discount would provide families with reassurance that they would receive support and that bills would be reduced "for good".
Price cap rise and market stabilisation charge
Since then, households have faced a 4% increase to Ofgem's energy price cap from 1 October, with forecasters warning that bills could climb by almost another £300 from January. Ofgem launched a consultation on Friday regarding proposals to reintroduce a measure designed to shield energy suppliers from significant fluctuations in gas and electricity prices.
The energy regulator announced it was considering activating its market stabilisation charge, a mechanism intended to prevent energy suppliers from going under when wholesale energy prices drop sharply amid turbulent markets. The measure functions by ensuring that any supplier gaining a customer through switching pays a charge to partially compensate the provider that lost them. It was previously introduced in April 2022 through to March 2024 in the wake of Russia's invasion of Ukraine.
Ofgem stated that reactivating the charge would not automatically trigger fees or push up customer bills, emphasising that payments between suppliers would only come into effect if wholesale prices dropped significantly. Martin Lewis, founder of MoneySavingExpert.com, warned it was a "form of switching penalty". He said: "In a nutshell, it means if wholesale energy prices drop sharply, the cheap fixes and switchers' deals offered will be a lot more expensive, in order to protect energy firms' profits."
Neil Kenward, Ofgem's Interim Director General of Markets, said: "We're preparing for what is likely to be a difficult winter for many households. While the energy market is stronger than it was during the energy crisis, volatility remains and the market stabilisation charge helps to protect consumers from that volatility." He added: "In volatile market conditions, it's important that suppliers can continue to secure the energy their customers need without taking unsustainable risks. By acting now, we can help maintain a stable and resilient energy market and protect consumers from the costs and disruption that can arise when markets become unstable."
Lewis said: "This is a 'market stabilisation charge' but the supplier market is pretty stable, and I doubt we are at the domino risk of suppliers going bust in the way they did in the early 2020s. A good few energy firms have made large profits since then and protecting them over winter by effectively dampening competition because it's 'not their fault' feels raw."
