Smaller energy suppliers will soon have to pay vulnerable customers the Warm Home Discount which is worth £140 a year.
Claire Perry, the government minister for energy, announced that by 2021 energy firms with 150,000 customers or more will have to pay the discount, which currently only applies to energy firms with more than 250,000 customers.
The Warm Home Discount gives 2.2 million vulnerable energy customers, who are either on a low income or have the guarantee credit element of pension credit, a one-off £140 discount on their electricity bill between September and March each year.
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Perry this morning announced there would be a phased roll-out of the discount between 2019 and 2021, meaning 97% of the energy market offer the discount by the final date - an increase of 3%. The phased approach of incrementally lowering the threshold will ensure smaller energy firms have time to plan for the change.
The government estimates the inclusion of smaller energy firms will help an extra 20,000 pensioners in 2019/20, and a further 10,000 in 2020/21.
The threshold of 150,000 customers will be reviewed after 2021 and could continue to fall, potentially to zero or a small minimum, according to the government.
The threshold is only being reduced for what's known as the 'Core Group' of the Warm Home Discount - those that get the guarantee credit element of pension credit.
Those in the 'Broader Group' - who can apply to get the discount provided they're in receipt of certain benefits - won't see any major changes to the scheme.
"Tackling fuel poverty is a key priority"
Perry said: "Tackling fuel poverty is a key priority for this government. Everyone who is automatically eligible for the £140 discount on their energy bills each winter should be able to get it. It shouldn't be dependent on which energy supplier they are with, so we want change that.
"This is why, as part of our commitment to create an energy market that works for everyone, we are lowering the threshold so more smaller suppliers will be able to offer this lifeline discount to their customers who most need it."