3 ways the Warm Homes Plan can cut bills and improve living standards

For too many of us, staying warm in winter and keeping energy bills affordable is a struggle. More than 3 years on from the start of an energy crisis driven by the volatile cost of gas, 3 in 10 households say they struggle to afford their energy bills. For some people this means rationing energy use, or even disconnecting from their supply altogether. And 31 million people live in energy inefficient homes, paying hundreds of pounds extra every year for energy that leaks out of their walls and windows. Living in a cold home can lead to dangerous conditions like damp and mould, and has serious impacts on people’s mental and physical health.

But the Government’s upcoming Warm Homes Plan could offer a route to warmer, healthier homes, which are heated in a more sustainable and affordable way. We know that upgrading leaky homes to make them more energy efficient can reduce people’s bills and help them live in a more comfortable home — boosting mental wellbeing and preventing conditions like childhood asthma. Switching to low-carbon heating systems can protect people against the fluctuating price of gas, helping them to keep energy costs stable and affordable.

Labour’s manifesto committed to investing £13.2 billion in the Warm Homes Plan, which could help upgrade up to 5 million homes over the next 5 years to make them warmer and cheaper to run. It’s essential that the Government takes this opportunity to help cut energy bills and safeguard households from future price shocks. If this commitment isn’t delivered, millions will be left with cold homes and unaffordable energy bills over the coming years.

With the Government expected to publish its full Warm Homes Plan this summer, we’re calling for a programme that prioritises:

• Accessible financial support to help people upgrade their homes
• Robust consumer protections to give people the confidence to engage with retrofit
• Free, independent and personalised advice to support households through the process

Financial support to help people upgrade their homes

19 million homeowners in the UK are interested in upgrading the energy efficiency of their homes, but 2 in 3 (66%) are concerned about the cost. Most homeowners don’t have enough savings to cover the average cost of upgrading energy efficiency and installing a heat pump. Even if costs were spread through monthly payments, millions wouldn’t be able to afford this on top of essential bills.

This means that homeowners will need support with the upfront costs of upgrades, to help them unlock the ongoing benefits and bill savings of an upgraded home. As we argue in our report Home Stretch, support should include:

• Fully-funded upgrades for lower income homeowners living in inefficient homes, which could be delivered through current schemes
• Government grants tapered by household income to subsidise a range of energy efficiency measures, in addition to the Boiler Upgrade Scheme (BUS) grant for low-carbon heating
• Government-backed low interest loans to spread any remaining upfront costs through affordable monthly repayments, with the lowest rates reserved for those on lower and middle incomes

Existing Government energy efficiency schemes such as the Energy Company Obligation (ECO) could be a key mechanism for delivering funded upgrades. Our research has found that these schemes can give life-changing improvements for consumers, but consumers can struggle to access them successfully because of factors like low awareness and varying experiences of the application process. We set out full recommendations for how the Government can make these schemes as accessible and usable as possible in our report Building Support.

The Government should also make rented homes warmer and more affordable to run, by delivering on its welcome commitments to raise minimum energy efficiency standards.

Protections for consumers

Most people who upgrade their homes are satisfied with the work they have done and see rapid benefits through improved comfort and cheaper bills. But in the minority of cases where installations are poor quality, households can find that measures don’t work properly or even cause damage or further issues to their homes. And the current complex redress process isn’t offering people the solutions they need. This risks causing harm to households and undermining confidence in retrofit more widely.

In our report Hitting A Wall, we’ve argued for a single quality scheme for all installers working in the low carbon home technologies market, so that consumers can be confident their installation will be carried out to a high standard by an accredited professional. Access to free, independent advice can help people navigate the process successfully. In the rare cases where things do go wrong, there should be a clear redress process through a single Ombudsman, backed up by a robust enforcement regime to tackle rogue traders.

Access to free, independent and personalised advice

Although many people are motivated to improve their homes and reduce their bills, homeowners often aren’t sure which measures are right for their properties. Some people can struggle to navigate processes around applying for financial support for upgrades, or need extra help when using new technologies.

This shows there’s a clear need for consumers to be able to access a national advice service. This should provide free, independent and personalised advice all the way through the upgrade process — from understanding what’s right for their property and where they can get help with the cost of their upgrade, to post-installation support. The service should be statutory and multi-channel so that people can access it in the way that works for them. It should include extra case handling support for people who need it, similar to Citizens Advice’s Extra Help Unit service.