Chancellor Rachel Reeves delivered the 2025 Budget, setting out taxation and funding changes that affect the electrotechnical sector and the wider construction industry1. For households, the most direct measures concern the Energy Company Obligation (ECO) and the funding that replaces it.
The Energy Company Obligation (ECO) scheme will be phased out by 31 March 20261. From April next year, households will see an average £150 reduction in energy bills as ECO costs are removed1. To offset this, the government announced an additional £1.5 billion capital investment for the Warm Homes Plan, alongside the £13.2 billion already allocated at the 2025 Spending Review1. The details of the plan have not yet been published1.
"The Energy Company Obligation (ECO) scheme will be phased out by 31 March 2026"
Other Budget measures touch on transport and skills rather than the home directly. A pay-per-mile system was introduced, with charges of 3p per mile for EVs and 1.5p for plug-in hybrids1. The Electric Car Grant (ECG) has been extended, providing up to £3,750 off the price of an EV under £42,000, rising to £50,000 from April 20261. Training costs for apprentices under 25 will be fully funded for SMEs from 2026, removing the 5% contribution currently paid by employers, as part of £820 million over three years under the Youth Guarantee1. The minimum wage for apprentices will rise by 6% to £8.001.
| Measure | Detail | Date |
|---|---|---|
| ECO phase-out | Scheme ends | 31 March 2026 |
| Energy bill reduction | Average £150 as ECO costs removed | From April 2026 |
| Warm Homes Plan | Additional £1.5 billion capital | Announced in Budget |
| Electric Car Grant | Price cap rises to £50,000 | From April 2026 |
| Apprentice training | Fully funded for SMEs under 25 | From 2026 |
Paul Collins, Technical Director at NICEIC, said the publication of the Warm Homes Plan could provide stability for contractors, but that details remain unclear1.
Why it matters for households
ECO has been a route to funded insulation and heating upgrades for eligible homes, delivered through energy suppliers. Its removal by 31 March 2026 ends that route, while the average £150 reduction in bills reflects the removal of scheme costs rather than a change in wholesale prices1. The £1.5 billion added to the Warm Homes Plan is intended to replace some of that activity, but how the money will be deployed, who will be eligible and what measures it will cover have not been reported1. For a household considering energy efficiency standards for privately rented homes in Scotland or the carbon reduction expected in new homes under the Future Homes Standard, the Budget does not change those rules; it changes the funding landscape around retrofit. The wider regulation and policy picture for household energy remains one of shifting support rather than settled entitlement.
What happens next
ECO ends on 31 March 2026, and the average £150 bill reduction takes effect from April 20261. The Electric Car Grant price cap rises to £50,000 from April 20261. The publication date for the Warm Homes Plan details has not been reported1.
Sources1 cited
- Budget 2025, niceic.com