The UK's largest energy supplier British Gas has announced it is no longer offering free cavity wall and loft insulation for the first time since 2013. But four big six energy firms do still offer free insulation – and customers of any provider can apply for it if they meet certain eligibility requirements.

British Gas's decision to end the insulation offer – it's no longer accepting any new applications – comes as it closes its insulation business, with the loss of 500 jobs. It says it plans to outsource any future loft and cavity wall insulation work.

The company's customers can still apply for free cavity wall and loft insulation, however, just from another provider.

British Gas first started offering free insulation three years ago, when the Government introduced the Energy Company Obligation (ECO) to help energy firms fund energy efficiency measures. Suppliers have to hit energy efficiency targets – something free insulation helps them do – or potentially face Ofgem sanctions. However the ECO is due to end in March 2017.

Martin Lewis
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What happens if I've already applied?

If you've already applied and not yet had the work done, British Gas says your application will be processed as normal – surveys and installations already booked in won't be affected.

Can I still get free insulation elsewhere?

Four of the big six energy firms are still taking applications for free loft and cavity wall insulation – this can be worth £700 combined.

You're free to pick any provider – you don't have to be a customer. Some providers give insulation away to suitable homes regardless of income, while some require you to be receiving certain benefits such as pension credit – see specific eligibility requirements below.

See our Free Insulation guide for full details.

What's next for the ECO?

In the November 2015 Autumn Statement, Chancellor George Osborne announced that a new scheme will replace the ECO from April 2017 – it'll be cheaper, and the Government expects households to save an average of £30/year on energy bills as a result. We don't have many details yet though. There will be a consultation to iron out what the new scheme will involve.

British Gas pulls free insulation offer
British Gas pulls free insulation offer

'Difficult news for employees'

British Gas says part of the reason it's cutting the offer is that the vast majority of the homes it could install free insulation in have already had the work completed. It also says it expects to fully hit its ECO targets despite the job cuts.

Mark Hodges, chief executive of energy supply and services at British Gas, says: "We are focused on improving the efficiency and effectiveness of our organisation to meet the changing needs of our customers. British Gas is well positioned to grow, but we must ensure that our costs allow us to be competitive for our customers.

"I recognise that this will be difficult news for the employees who may be affected. However I believe today's announcement is in the best long-term interests of the business."

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