Do I need to worry about energy prices this winter? Warm home discount explained

The weather has turned and the family argument over the thermostat has begun again.

With energy prices remaining high, what government support (such as the Warm Homes Discount) will people have to help pay their heating bills this winter; is it enough to even "touch the sides"; and is there a danger some vulnerable families could end up missing out?

Hannah Fearn talks to the experts to find out.

Do I need to worry about energy prices this winter? I thought they were dropping! The energy price cap set by the government now stands at £1,834 a year and will stay fixed until the end of December. That’s down from more than £4,000 in January this year, but a rise is expected in January. The price cap is an average figure for a family home based on the maximum price that energy companies can charge consumers per unit, but it's not a ceiling. High energy users will still pay more.

So is there any government help available this year? That depends on your income and outgoings. With prices falling there is no universal support scheme for energy bills this winter, even though they remain historically high. However the poorest households are entitled to some government subsidies in the coming months through the ‘warm home discount scheme’.

Right. Who qualifies? Two groups will get a one-off £150 discount to their bills: pensioners who are in receipt of pension credit, and those who are considered to be both on a low income and also facing higher than average energy costs.

How can people claim? Most people who are eligible will have the discount applied directly to their bills as the government can use council tax data to work out who qualifies. But others will be sent a letter telling them to apply for the funds if they think they could qualify for support. They will then be asked to prove both their low income (by universal credit or other benefit claims) and that their property is expensive to heat.

That sounds complicated. It is. Campaigners say that many families who could be entitled to the £150 discount simply won’t realise they can apply for or may not be able to afford to prove their eligibility. “People often don’t open letters when they’re not sure where they’re from. Often elderly and vulnerable people are worried about scams so they just don’t take action; they bin the letter,” Matt Copeland, head of policy at National Energy Action told Yahoo News UK. “The main way to prove [eligibility] is to provide an energy performance certificate (EPC). Low income households clearly can’t afford to get an EPC, which costs at least £50, just to claim back £100.”

So some people will miss out? Copeland said an estimated 300,000 people failed to claim support they were entitled to last winter because the process was so difficult to follow, and the figure could be even higher this year. "Even for households who were still theoretically eligible, 300,000 households missed out as they were required to prove their eligibility and were left baffled by the complexity of the new scheme," the NEA has said.

Is the payment enough? There are about 6.5 million families living in fuel poverty in the UK but only 3 million households will qualify for the warm home discount this winter. According to National Energy Action today's £150 handout is only £10 more than it was a decade ago, even though energy prices are now almost £800 higher than they were back then. “That’s not touching the sides,” Copeland said.

What about people on alternative forms of energy? Homeowners and tenants of apartments in large blocks are often supplied energy via a heat network, managed by a building management company or local authority. Government schemes to support these consumers with spiralling costs have been patchy. A spokesperson for the Heat Trust told us that customers on heat networks have faced bills four or five times higher than the average residential domestic gas customer would be paying. Some low income social housing tenants on heat networks are still paying as much as £3,500 a year for heating and hot water. The discount scheme for landlords running these networks runs out in April but many tenants have yet to be reimbursed.

When will my energy bills finally drop back to pre-crisis levels? The energy price cap is expected to go up again in January to an estimated £1,898 a year and drop a little to £1,781 by this time next year. But there’s no sign we’re likely to return to cheap energy any time soon, meaning the government may have to reconsider how much support it gives to vulnerable households in 2024.

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