Double the number of households in Britain will get £150 off their energy bills this winter as the government changes the rules on who qualifies for the Warm Home Discount.
Anyone on means-tested benefits will automatically see the money knocked off their bills no matter what size of property they live in.
However, the cost could be covered by raising fees on all customer bills through the standing charge, unless savings can be found by suppliers.
While debt charities and energy groups have welcomed the move, some say the scheme still leaves out some of those most at risk, including those on non-means tested benefits.
Simon Francis from the End Fuel Poverty Coalition said: “With bills still hundreds of pounds higher than in 2020, millions will continue to face unaffordable energy and cold, damp homes this winter.”
Energy companies pay for and distribute the £150 discount to people’s bills across England, Scotland and Wales, but the government sets the criteria for who should receive it.
Those rules were tightened under the previous administration, limiting the payment to those on the guaranteed element of pension credit, or those on means-tested-benefits living in a home with a high energy score.
Now the qualification about property size, type and home energy score is being scrapped. As a result this winter 2.7 million more homes will get this extra energy bill help, including almost a million households with children.
This extension comes hot-off-the-heels of the government U-turn to reinstate the Winter Fuel Payment to the majority of pensioners.
The bill for expanding the Warm Home Discount will be paid by energy companies and could be passed on through the standing charge, so it is possible all customers will see a slight increase in bills in the autumn to cover this announcement.
However, the government says any rise will be cancelled out by savings made by cutting energy companies’ expenditure and doing more to sort problem debt.
Household bills controlled by the energy price cap have been reduced over the summer months, and standing charges fell in all areas because the rules on what expenditure companies can pass on was restricted.
However, current market expectations are for another rise in gas and electricity bills from the start of October because of higher oil and gas prices.
Representing energy suppliers, Energy UK’s chief executive Dhara Vyas welcomed the announcement and said she hoped to see more help for those most in need “by accelerating progress on a new improved targeted support scheme”.
Earlier this month, Chancellor Rachel Reeves used the Spending Review to confirm £13.2bn will be spent on the government’s Warm Homes Plan, which aims to make homes more energy-efficient and cheaper for people to heat.
Meanwhile, the government said on Thursday that it wants to expand automatic compensation schemes for energy customers.
It wants consumers to get automatic compensation for people spending too long on hold when calling their energy companies, and for customers getting unexpectedly high bills due to firms not adjusting direct debits.
The proposals are also designed to cut the time suppliers have to respond to a complaint.
Under the current scheme, energy suppliers are given eight weeks to respond to a complaint.
If a customer does not hear back from the company in that time, or their request is not resolved, they would then need to contact the Energy Ombudsman to investigate further.
The proposals would speed up that process, giving suppliers four weeks to respond and automatically referring customers to the Ombudsman if they do not hear anything in that time.
Households are already entitled to automatic compensation under some circumstances, including if their switch to a new supplier goes wrong.