The Department for Energy Security and Net Zero (DESNZ) lowered the threshold for households considered as having high energy costs under Core Group 2 of the Warm Home Discount in England and Wales, Ofgem's annual report on Scheme Year 12 (2022-23) states. The change expands the eligible cohort to more households and is intended to mitigate the risk of a repeat of the underspend seen in SY121.
The report records that £443.8 million was spent under the scheme in SY12, around £74 million less than DESNZ had anticipated. Ofgem attributes this in part to fewer households than expected calling the dedicated Warm Home Discount helpline after not automatically receiving a rebate. Ofgem states that DESNZ are rolling forward the unspent funds into the remaining scheme years and have lowered the threshold for households considered as having high energy costs to mitigate the risk of a similar underspend happening again1.
"This entailed lowering the threshold for households considered as having high energy costs, thereby expanding the eligible cohort to more households"
SY12 was the first year in which the Warm Home Discount operated as separate schemes for England and Wales and for Scotland, underwritten by separate pieces of legislation. Rebates of £150 were provided to over 2.66 million customers, up from 2.32 million in SY11, with 2.4 million of those in England and Wales and 256,409 in Scotland. Of the 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.
On supplier compliance, Ofgem reports that of suppliers reporting end of year compliance, 16 met their respective spending obligations for the England and Wales scheme. Four suppliers did not meet their non-core spending obligations, falling short by a combined total of £13,431. Ecotricity and Good Energy were both found to be non-compliant due to an underspend on their non-core spending obligations. So Energy was £2,069 short, reaching 99.45% of its obligation spending target, and Utilita was £8,888 short, reaching 99.24%. The shortfall has been added to So Energy's spending obligations for SY13, and the supplier agreed to pay the same again into Ofgem's Voluntary Redress Fund; Utilita provided £9,000 of non-repayable financial assistance payments to customers it knows to be financially vulnerable. Two suppliers, Utility Warehouse and Foxglove Energy, failed to meet a key scheme reporting deadline and were late by a significant length of time, and six suppliers had minor contraventions with a total of 155 recorded. Ofgem states that the 154 infringements in the Core Groups represent a very small fraction of the 2.4 million rebates provided in England and Wales1.
The report also records the final reconciliation, which took place in November 2023, when £5.3 million was collected and subsequently distributed to eligible suppliers1.
| Supplier | Spend against obligation |
|---|---|
| British Gas | 105.10% |
| Eon | 101.59% |
| E | 100.68% |
| Bulb | 100.58% |
| EDF | 100.09% |
| Foxglove | 100.07% |
| Ecotricity | 100.00% |
| ESB | 100.00% |
| Good Energy | 100.00% |
Why it matters for households
The Warm Home Discount is a rebate applied to electricity bills for households in or at risk of fuel poverty, and the Core Group 2 threshold determines which households on low incomes with high energy costs are eligible automatically, without needing to apply. Lowering that threshold widens the group of homes that can receive the £150 rebate automatically, which matters for a household's energy independence because it reduces the bill without any action being required from the occupant1.
The SY12 figures show that the scheme reached more households than in SY11 but still spent less than government expected, which is the reason given for the threshold change. The report does not state the new threshold value, the number of additional households expected to become eligible, or the date from which the change applies; those details have not been reported in this document1.
The compliance figures also show that the scheme's delivery depends on suppliers meeting spending obligations, and that Ofgem took action where they did not. For households, the practical effect is that the rebate is administered through suppliers rather than claimed from government, and disputes about it fall within the wider energy complaints and redress system. The scheme is set by DESNZ and administered by Ofgem, with separate arrangements under energy and buildings policy in Wales sitting alongside the England and Wales scheme1.
What happens next
For SY13, the threshold for supplier participation fell further, so that any energy supplier with 1,000 or more domestic customers is now required to participate, broadening access to the main elements of the scheme. In SY12 the participation threshold had already been reduced from 150,000 domestic customers to 50,000, which meant one more supplier, Good Energy, was required to participate1.