The Warm Home Discount operated as two separate schemes in Scheme Year 12 (2022-23), one for England and Wales and one for Scotland, each underwritten by its own legislation, according to Ofgem's annual report on the scheme year1. The rebate value rose from £140 to £150, and the threshold at which energy suppliers must take part fell from 150,000 domestic customers to 50,000, which brought one more supplier, Good Energy, into the scheme1.
In England and Wales the reforms introduced a new Core Group 2, covering households on low incomes with high energy costs. Ofgem said this "entailed lowering the threshold for households considered as having high energy costs, thereby expanding the eligible cohort to more households"1. Scotland kept the structure used in earlier years, with a Core Group and a Broader Group1.
Suppliers delivered £443.8 million of support in SY12, made up of £395.2 million in England and Wales and £48.5 million in Scotland, an increase of 23 per cent on the £359.4 million spent in SY111. Rebates of £150 went to more than 2.66 million customers, up from 2.32 million in SY11: 2.4 million in England and Wales and 256,409 in Scotland1. Of that total, 946,572 rebates worth £142.0 million went to eligible low-income pensioners, down slightly from 968,452 in SY11, while 1.72 million other customers received rebates, up from 1.35 million1. Industry Initiatives delivered £44.3 million, up from £34.8 million1.
The £443.8 million spent was around £74 million less than the Department for Energy Security and Net Zero had anticipated. Ofgem attributed this partly to fewer households than expected calling the dedicated Warm Home Discount helpline after not receiving a rebate automatically, and said the department is rolling unspent funds into remaining scheme years1.
"Although a total of £443.8 million was spent in Scheme Year 12... this was around £74 million less than anticipated by DESNZ"
On compliance, 16 suppliers met their spending obligations for the England and Wales scheme1. So Energy fell £2,069 short, reaching 99.45 per cent of its target, and Utilita was £8,888 short at 99.24 per cent1. So Energy's shortfall has been added to its SY13 obligations and it agreed to pay the same amount again into Ofgem's Voluntary Redress Fund; Utilita provided £9,000 of non-repayable financial assistance to customers it knows to be financially vulnerable1. Ecotricity and Good Energy were found non-compliant over underspends on non-core spending obligations1. Utility Warehouse and Foxglove Energy missed a key reporting deadline by a significant length of time, and six suppliers recorded 155 minor contraventions between them1. Ofgem said the 154 infringements in the Core Groups represent a very small fraction of the 2.4 million rebates provided in England and Wales1. A final reconciliation in November 2023 collected £5.3 million, distributed to eligible suppliers1.
Why it matters for households
The split means the discount is now administered under two sets of rules, so eligibility and the route to a rebate depend on where in Great Britain a household lives. In England and Wales the automatic route widened through Core Group 2, which targets low-income households with high energy costs rather than pensioners alone; in Scotland the Core Group and Broader Group structure continued unchanged1. The higher rebate of £150 and the lower supplier participation threshold of 50,000 customers brought a further supplier into the scheme, which affects which customers can receive a rebate from their own supplier1. The £74 million underspend indicates that a substantial share of the intended support did not reach households in the year it was budgeted for, and the department has carried the money forward rather than losing it1. For a household's energy independence, the discount is a one-off reduction on the electricity bill rather than a change to the fabric or heating of the home, so it lowers the cost of the energy used but not the amount needed.
What happens next
For SY13 the threshold for supplier participation fell again, so any energy supplier with 1,000 or more domestic customers is required to take part, broadening access to the main elements of the scheme1. The department has also lowered the threshold for households considered to have high energy costs, to reduce the risk of a similar underspend1. So Energy's shortfall has been added to its SY13 spending obligations1.