The government published its Warm Homes Plan on 21 January 2026, allocating £15 billion and confirming that the Energy Company Obligation (ECO) scheme will be abolished and Salix replaced by a new warm homes agency. The statement was made in the House of Commons and recorded in Hansard for 27 January 20261.
The plan sets out £5 billion of public investment to deliver home upgrades directly for low-income families, including those in social housing and low-income owner-occupiers. The government said support would be funded through public investment rather than levies on bills, and that local authorities and mayors would have a leading delivery role. A working group of contractors, social housing providers and local authorities will be convened by the Minister for Energy Consumers1.
On the agency itself, the government said:
"By consolidating functions from Ofgem and other organisations and abolishing Salix, there will be no increase in arm's length bodies, we will establish a new warm homes agency"
The agency is to deliver impartial advice and guidance, work with local authorities and businesses, oversee government schemes, and sit alongside a reformed system of consumer protection. No cost estimate for the new body or for the net cost of the reorganisation was given in the statement; a peer in the Lords debate asked for one and it had not been provided in the material recorded1.
On heating, the Boiler Upgrade Scheme is to be expanded with investment increasing every year to 2030. The government described a universal offer of £2,500 for a heat battery or air-to-air heat pump, alongside £7,500 for a conventional heat pump1. Up to £2 billion is being set aside to subsidise zero and low-interest loans for solar panels, batteries and other technologies, with a further £3 billion available for loans and investments through a warm homes fund1.
| Measure | Figure |
|---|---|
| Total Warm Homes Plan allocation | £15 billion |
| Direct home upgrades for low-income families | £5 billion |
| Heat battery or air-to-air heat pump offer | £2,500 |
| Conventional heat pump offer | £7,500 |
| Loans subsidy for solar, batteries and other technologies | Up to £2 billion |
| Further loans and investment through warm homes fund | £3 billion |
| Heat pump manufacturing investment | £90 million |
Private landlords will have to upgrade properties to minimum energy efficiency standards by 2030, with similar rules consulted on for the social rented sector. The government said these measures alone would lift more than half a million families out of fuel poverty1. The Future Homes Standard is to be published shortly, with solar panels fitted as standard in new homes for the first time1.
Why it matters for households
The plan changes how home upgrade support is delivered. ECO, which placed obligations on energy suppliers, is being replaced by direct public funding routed through local authorities and mayors, so the route by which a household accesses insulation or heating support is expected to change. The Warm Homes Plan sets out the government's stated intent to simplify what it called a fragmented system.
For households considering a heat pump, the Boiler Upgrade Scheme grant levels quoted in the statement are £7,500 for a conventional heat pump and £2,500 for a heat battery or air-to-air unit. Eligibility rules, including for homes with a gas boiler, are covered in the site's guidance on Boiler Upgrade Scheme eligibility and gas boiler eligibility.
The Lords debate recorded concerns that were not resolved in the statement. A peer said two-thirds of people with heat pumps find them more expensive to heat their homes than their previous system, and asked whether the department has plans to address the operating costs of heat pumps. The same peer said the impact assessment contained no reference to the impact on tenants of the requirements placed on landlords, and asked whether those costs would be passed on to tenants. No answer was recorded in the material1.
For renters, the 2030 minimum standard for private landlords is a dated commitment. For owner-occupiers, the loan subsidy for solar and batteries is described as a first step, with further funding through the warm homes fund over coming years1.
What happens next
The Future Homes Standard is to be published shortly, with solar panels as standard in new homes1. The Minister for Energy Consumers will convene a working group of contractors, social housing providers and local authorities1. A task force with the TUC is to be established on job quality and skills1. Private landlords face a 2030 deadline for minimum energy efficiency standards1.
Sources1 cited
- Warm Homes Plan - Hansard - UK Parliament, hansard.parliament.uk