The average household will save around £30 a year on energy bills from 2017 as a result of a shake-up of the Government's energy efficiency scheme, Chancellor George Osborne announced today in the Autumn Statement.

The current Energy Company Obligation (ECO) scheme, which helps pay for households to make energy efficiency improvements and runs until March 2017, will be replaced with a new, cheaper household energy efficiency scheme from April 2017.

There's nothing you need to do to claim the saving – it should just be reflected in cheaper energy bills as suppliers will no longer have to meet such demanding energy efficiency targets.

What is the ECO scheme?

The ECO is a scheme that obligates larger energy suppliers to improve the energy efficiency of homes, for example with free insulation or boilers.

It was introduced in 2013 alongside the Green Deal – according to the latest figures, almost 1.6 million ECO measures had been installed by the end of September this year. An Ofgem report earlier this year estimated that ECO costs around £40/year on the average bill.

How will the new energy efficiency scheme work?

The Government says the new scheme, which will replace the ECO, will upgrade the energy efficiency of over 200,000 homes, saving those homes up to £300 off their average annual bill.

However there are very few details yet on how this will actually work or what you'll be able to get funding for under the scheme.

A Treasury spokesperson told us a consultation will be held in due course on the details of the scheme.

Martin Lewis
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How much will households save?

A projection published today alongside the Autumn Statement sets out the savings predicted as a result of replacing the ECO and other changes to green policies, including a shake-up of the Renewables Obligation and feed-in tariff schemes. It estimates the average household will save £30 on an annual bill in 2017-18, rising to £35 in 2020-21.

It's not yet clear what steps the Government will take to ensure savings are passed on to energy users though. We've put a series of questions to the Treasury and Department of Energy & Climate Change and will update this story as soon as we're told more.

Warm Home Discount extended

The Government has also announced that the Warm Home Discount will be extended until the winter of 2020-2021. The Warm Home Discount gives certain low-income households a one-off reduction of £140 on their electricity bills – this discount is pegged to rise with inflation.

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