Energy autoswitching to be trialled and Warm Home Discount payments to rise under Government shake-up
Autoswitching households to cheaper energy deals is to be tested under new Government plans to keep gas and electricity bills affordable, while Warm Home Discount payments will increase.
The measures have been announced today as part of a drive to move the UK away from fossil fuel use, to cut carbon dioxide emissions that can contribute towards global warming and to support new green jobs. Other plans that will directly impact households include:
- Testing automatically switching energy customers to fairer deals. The Government says this will help it tackle "loyalty penalties" where households who stay with the same provider end up paying more than those who switch. But it's already possible to have your energy switched automatically using MoneySavingExpert.com's Cheap Energy Club - see below for more on this.
- Extending the Warm Home Discount. The Warm Home Discount is a discount applied to eligible people's energy bills during the winter months - it's currently worth £140, but the Government says it will give £150 off bills in future. The scheme will also be guaranteed until 2026 as part of a £6.7 billion package to support vulnerable people over the next six years. You can find out more about the Warm Home Discount and other help energy cost-cutting schemes below, as well as in our Housing & Energy Grants guide.
Autoswitching to be tested - but don't wait for the Government's scheme
The Government says it will test automatically switching households to cheaper energy deals to tackle loyalty penalties as well as considering whether to change the current system to prevent households from being automatically rolled onto pricey default tariffs once cheaper fixed deals have ended.
We've asked for more information and we'll update this story when we hear back, but it's likely we won't know more until next spring as consultations on this are set to take place by March 2021.
But there's no need to wait for a future Government scheme, as it's already possible to sign up to energy autoswitching services. As part of our Cheap Energy Club's autoswitching scheme, for example, you can fill in your preferences and get switched to the cheapest tariff every year with just one click. And crucially, your top tariff will be picked based on a whole of market comparison rather than just the cheapest deal from your current supplier.
Warm Home Discount extended - here's how it works
The Warm Home Discount scheme, meanwhile, requires suppliers, by law, to help vulnerable people in the UK pay for their energy - you'll qualify if you get pension credit or certain other benefits. The money isn't paid to you – it's a discount applied to your electricity bill between September and March. If you're on a prepayment meter, you'll usually be sent a top-up voucher.
If you get the 'guarantee credit' element of the the pension credit benefit, and your name (or your partner's) is on the bill, you're in what's known as the 'core group' and you should get the discount automatically if your supplier's part of the scheme. Your supplier will write to you, usually between October and December, and confirm when the money will be deducted from your bill - though you may be asked to get in touch to confirm your details.
If you get certain other benefits, you may qualify as part of the 'broader group' - though if this is the case, you'll need to apply directly.
Under today's plans the discount will now be extended, meaning eligible households will be able to get a £150 discount every year until the winter of 2025/6. The Government is also increasing its spending on the scheme. There's full eligibility criteria and details of participating suppliers in our Housing & Energy Grants guide.
What does the Government say?
Business and energy secretary Alok Sharma said: "Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution...
"At every step of the way, we will place affordability and fairness at the heart of our reforms - unleashing a wave of competition so consumers get the best deals possible on their bills, while protecting the vulnerable and fuel poor with additional financial support."