Warm Homes Plan: A Guide to Government Support for Energy Efficiency and Lower Bills
LONDON, 20 January 2026 – The government’s flagship Warm Homes Plan, a £13.2 billion strategy to upgrade millions of homes, cut fuel poverty, and reduce carbon emissions, remains a work in progress as key details are finalised. While the full overarching policy framework is delayed, several major components are already in motion, from expanded heat pump grants to targeted support for low-income and rented households.
The Core Vision: A £13.2bn Pledge
Chancellor Rachel Reeves confirmed the full £13.2 billion funding for the Warm Homes Plan in the June 2025 Spending Review, upholding a key Labour manifesto pledge. The investment, to be delivered between 2025/26 and 2029/30, aims to upgrade up to five million homes, reduce energy bills by hundreds of pounds annually, and accelerate progress towards the UK’s net zero targets. The plan is designed to be a comprehensive framework, pulling together and scaling up various existing grants and initiatives for insulation, solar panels, battery storage, and low-carbon heating.
Key Components Already Underway
Despite the delay in publishing the full strategic document, several pillars of the Warm Homes Plan are active and being expanded:
1. The Boiler Upgrade Scheme (BUS)
The government has significantly boosted this grant scheme. Homeowners in England and Wales can now receive £7,500 off the cost of installing an air-source or ground-source heat pump. The budget for the scheme was nearly doubled to £295 million for the 2025/26 financial year. Furthermore, the scheme has been expanded to include air-to-air heat pumps (which can also provide cooling) and heat batteries, with grants of £2,500 available for these technologies.
2. Planning Reforms for Heat Pumps
A major barrier to heat pump installation has been removed in England. The government has abolished the “one-metre rule”, which previously required heat pumps to be sited at least one metre from a property boundary and often necessitated planning permission. This reform is intended to simplify and speed up the installation process.
3. Support for Social Housing and Low-Income Households
Two targeted funds are delivering upgrades:
Warm Homes: Social Housing Fund (Wave 3): £1.29 billion has been allocated to help social landlords insulate homes and install low-carbon heating, with works to be completed by September 2028.
Warm Homes: Local Grant: A £500 million fund enables local authorities to deliver energy performance upgrades and low-carbon heating to low-income, privately-owned homes (owner-occupied or rented) with an EPC rating of D-G.
4. The Warm Home Discount Scheme 2025/26
Running alongside the longer-term plan, this direct bill support scheme is being expanded for the coming winter. The government is consulting on removing the ‘high cost to heat’ eligibility criteria in England and Wales. This would mean all households in receipt of means-tested benefits would qualify for a £150 rebate off their energy bill, potentially helping an estimated 6.1 million households (up from 3.4 million). The qualifying date for the 2025/26 scheme is 24 August 2025.
The Transition: ECO Scheme Ends, Warm Homes Plan Takes Over
A significant shift confirmed in the Autumn 2025 Budget is the conclusion of the Energy Company Obligation (ECO) scheme in March 2026. The ECO, which placed a levy on electricity bills to fund insulation and heating upgrades for fuel-poor households, has been criticised for its cost and complexity. Its remaining budget will be rolled into the Warm Homes Plan, with future support to be funded through general taxation rather than energy bills—a move the government says will cut the average household energy bill by around £59.
Delays and Industry Calls for Clarity
The full Warm Homes Plan policy document, initially expected in October 2025, has been delayed. Officials state the need to finalise arrangements following the scrapping of the ECO scheme. This delay has left homeowners and the retrofit sector seeking certainty on eligibility criteria, grant levels, and application processes for the broader plan. Industry bodies have urged the government to expedite the announcement to maintain momentum and protect jobs in the green sector.
Future Regulations: Private Rented Sector
Looking ahead, the government is consulting on raising minimum energy efficiency standards for all private rented homes in England and Wales to EPC Band C by 2030 (up from the current Band E). This could save tenants an estimated £240 per year on energy bills. Landlords would have a cost cap of £15,000 per property to meet the new standard.
Key Facts at a Glance
| Scheme / Policy | Key Detail |
|---|---|
| Warm Homes Plan (Total Funding) | £13.2 billion (2025/26 – 2029/30) |
| Boiler Upgrade Scheme Grant | Up to £7,500 for a heat pump |
| Warm Home Discount 2025/26 | £150 rebate; eligibility potentially expanding to 6.1m homes |
| ECO Scheme End Date | 31 March 2026 |
| Private Rented Sector Target | EPC Band C minimum by 2030 (under consultation) |
| Immediate Target (2025/26) | Up to 300,000 homes to receive upgrades |
Frequently Asked Questions
What is the Warm Homes Plan?
It is the UK government’s strategic, £13.2 billion initiative to make homes warmer, cheaper to heat, and more energy efficient. It combines and expands various grants for insulation, low-carbon heating (like heat pumps and solar panels), and targeted support for low-income households.
How do I get a heat pump grant?
Homeowners in England and Wales can apply for the £7,500 Boiler Upgrade Scheme grant through an accredited installer. The installer applies for the voucher on your behalf. You must own your property and be replacing a fossil fuel heating system like a gas or oil boiler.
Is the Warm Home Discount changing?
For winter 2025/26, the government is consulting on removing the ‘high cost to heat’ rule. If implemented, this would mean anyone in England and Wales receiving a qualifying means-tested benefit should automatically get the £150 discount applied to their electricity bill. You do not need to apply; if eligible, you will receive a letter from your energy supplier.
What is replacing the ECO scheme?
The Warm Homes Plan is the overarching framework that will succeed ECO. Support for energy efficiency measures will be delivered through its various components, such as the Warm Homes: Local Grant and Social Housing Fund, funded via general taxation rather than a levy on bills.
When will the full Warm Homes Plan details be released?
The government has confirmed the plan is delayed but is expected imminently. The sector awaits publication for full details on eligibility and application processes for the comprehensive suite of support.