We welcomed the opportunity to respond to this Department for Energy Security & Net Zero (DESNZ) consultation on continuing the Warm Home Discount (WHD) scheme.
Our insights show the need for well-targeted, effective support on energy affordability is abundantly clear. Energy arrears are the most common priority debt that StepChange debt advice clients face – with average energy debt amounts continuing to rise.
Nationally representative polling StepChange commissioned in September 2025 found that three in ten (31%) UK adults were worried about their ability to pay their energy bills over the next six months, rising to two in five (40%) of those in receipt of benefits and over half (53%) of those receiving Universal Credit (UC) specifically.
These insights must be situated in a context where typical energy bills continue to sit far above pre-energy crisis averages, while the level of targeted financial assistance available to support those in or at risk of fuel poverty has quite simply not sufficiently kept pace.
As an initial step, it’s certainly welcome to see the Government propose to continue offering the WHD scheme for a new five-year period from winter 2026/27 – 2030-31, considering around 6 million GB households are expected to benefit from the scheme this winter.
We were particularly pleased to see that the Government intends that the Industry Initiatives element of the scheme be retained, as this is a further effective route through which practical, meaningful support can be provided to customers who are in or at risk of fuel poverty – including debt support and energy efficiency advice.
That being said, the scheme payment – introduced in 2011 as a singular £120 sum over winter, intended to help those living in fuel poverty with their energy costs – has only increased by £30 over its lifetime, and by a minimal £10 since winter 2014/15. Meanwhile, increases in energy costs have far outstripped these changes.
In practical terms, with historically high levels of energy debt in the system following years of high prices which continue to persist, many households will continue to struggle to meet their energy costs – both debt repayments and ongoing usage – without further, more comprehensive action on both affordability and debt.
This includes the implementation and delivery of a nationwide, energy debt relief scheme to tackle historic debt – an intervention StepChange has long been calling for, and which Ofgem is currently pursuing – as well as urgent work to drive up standards in the energy debt pathway and bring about long-term, widespread energy affordability.
It was therefore good to see the Government directly acknowledge that the "amount of support available [through the WHD scheme], which must be balanced against the cost of providing it, is insufficient to fully alleviate the level of fuel poverty faced by many households" and express the intention to “explore improvements, both in terms of the level of support available and the reach of the scheme.”
StepChange wants to see targeted, enduring intervention which protects consumers in vulnerable situations, including those on lower incomes, from unaffordable energy costs once and for all. It is vital that the WHD scheme is made fit for purpose if it is to be the policy vehicle used in response to deep energy affordability pressures and essentially act as a form of social tariff, which a wide variety of stakeholders have long advocated for. This would involve increasing the financial assistance available and enhancing the effectiveness of eligibility criteria, which would be best facilitated by improved data-sharing.
The need for more substantial intervention to shore up affordability and halt the buildup of unsustainable debt levels could not be clearer, with the latest figures from Ofgem showing that the amount of money owed to energy suppliers by customers has increased to a new record high of £4.4 billion. While our response recognised that there are legislative limitations to the changes that the Government can make in the design of the 2026/27 scheme year, we look forward to engaging with DESNZ on its planned work to explore improvements beyond next winter – action it must pursue with urgency.