UK cost of living: 6 government grants helping the vulnerable & landlords

Key takeaways:

  • The ECO4 Scheme can help you insulate your home and switch to a more efficient energy source.
  • 0% VAT on renewables until 2027, helping save nearly £1,000
  • Smart Export Guarantee can help households earn money from the renewable energy they create.

It’s no secret that the cost of living in the UK is high. In fact, it’s been steadily rising for years now and for some people, this can be a real struggle. Fortunately, the government has put in place several grants and schemes to help those who are vulnerable or struggling to keep up with the cost of living. In this post, we’ve highlighted six money-saving grants that could help vulnerable people (and landlords) navigate the current cost of living crisis. Let’s get into it:

In this article:

  1. ECO4 Scheme
  2. VAT reduction to renewables
  3. Energy Price Guarantee
  4. Energy Bill Discount
  5. Winter Fuel Payment
  6. Smart Export Guarantee

1) ECO4 Scheme

Thanks to the Energy Company Obligation Scheme (ECO4), the government has allocated £4 billion towards the installation of more efficient energy sources across England, Wales, Scotland and Northern Ireland. ECO4 takes a fabric-first approach, meaning that it looks at improving the property with insulation first before installing new heating systems. Loft insulation, internal walls insulation, cavity wall insulation and room in a roof insulation are all covered by the grant, helping homes lock in the heat and save on their energy bills. Read more: Can I get a free government insulation grant if I’m not on benefits? This scheme also allows low-income households to replace their inefficient heating systems with more economical and environmentally friendly systems, like solar panels and heat pumps. To make it even better, VAT for solar panels has been slashed from 5% to 0% up until 2027 (but more on that later on!)

Benefits of ECO4 Scheme

  • Replace inefficient heating systems with something greener
  • Save up to £1,600 annually
  • Lower your carbon footprint

Am I eligible?

To be eligible for the ECO4 Scheme, applicants will need to meet the following criteria:

  • You must own your property or have permission from your landlord to make energy efficiency improvements.
  • Your property must have an EPC rating of band C or below.
  • You must be receiving certain benefits, such as income support, Universal Credit or child tax credit.

2) VAT reduction to renewables

As we mentioned earlier, the government has reduced the VAT on renewables from 5% to 0% until 2027. This huge tax saving of nearly £1,000 applies to solar panels and heat pumps, making now the perfect time to invest in renewable energy. The cost of solar panels has also fallen dramatically in recent years, making them a more viable option for many households.

Benefits of VAT reductions on renewables

Am I eligible?

Yes, the VAT reduction applies to all solar panel installations.

3) Energy Price Guarantee

The Energy Price Guarantee (EPG) is a government-backed initiative in response to the soaring cost of energy putting millions in fuel poverty this winter. By freezing the cost of energy per unit, the EPG sets the average energy bill at £2,5000 over the next six months (starting 1st October). Households on standard variable tariffs will benefit the most from the EPG. Unfortunately, households that are fixed at a higher rate may find that their energy costs exceed the £2,5000 discount set by the EPG. Luckily, British Gas, Shell, EON, Scottish Power, Ovo, Octopus and EDF have all agreed to Martin Lewis’ request to allow customers to switch from a fixed rate tariff to a variable with no penalty fee if the cost exceeds the EPG.

Benefits of the Energy Price Guarantee

  • Freeze energy prices for six months
  • Save up to £500 on your energy bill
  • Switch providers with no penalty fee

Am I eligible?

Yes, the cap takes effect automatically so there is no need for you to do anything.

4) Energy Bill Discount

In addition to the Energy Price Guarantee, all domestic energy consumers will benefit from a £400 Energy Bill Discount over six instalments, starting from October 2022. This non-repayable grant will be automatically deducted to energy bills, offering discounts of up to £67 per month to 29 million households across the UK. Houses most in need will receive further support, including:

  • A £650 one-off Cost of Living Payment for approximately 8 million homes on means-tested benefits.
  • A one-off £300 Pensioner Cost of Living Payment for over 8 million pensioner households alongside the Winter Fuel Payment (we’ll touch on that in a little bit).
  • A £150 one-off Disability Cost of Living Payment for around six million people receiving specific disability benefits.
  • £500 million increase to the Household Support Fund, offering vulnerable households help covering the cost of essentials (food, clothing and utilities).

Benefits of the Energy Bill Discount

  • A £400 grant over six instalments
  • Discounts of up to £67 per month
  • One-off cost of living payments for low-income households

Am I eligible?

To be eligible for the energy bill discount, you must:

  • Be a domestic energy consumer (i.e. not a business)
  • Have an electricity or gas account with a Supplier
  • The government has also said that the energy bill discount will be “passported” to eligible households, meaning that if you’re already receiving certain benefits (such as Universal Credit), you’ll automatically be enrolled in the scheme.

5) Winter Fuel Payment

The Winter Fuel Payment is a government-backed initiative to help households with the cost of heating during the winter months.  Households can claim up to £300 towards their energy bills, and the payment is automatically deducted from their bill. The Winter Fuel Payment is usually paid between November and December, but this may vary depending on your energy supplier. Once you’ve enrolled for the payment, you’ll get it automatically the following year.

Am I eligible?

To be eligible for the Winter Fuel Payment, you must:

  • Be over the age of 66
  • Receive certain benefits, such as Pension Credit or Universal Credit
  • Have lived in the UK for at least one day during the qualifying week (the first full week of September)

6) Smart Export Guarantee

While not technically a government grant, the Smart Export Guarantee is a great way of getting money back from your renewable energy. The Smart Export Guarantee pays households for the electricity they generate from renewable sources, such as solar panels. Households can claim up to £100 per year from the scheme, and the payments are made directly into your bank account.

Am I eligible?

  • To be eligible for the Smart Export Guarantee, you must:
  • Be a domestic energy consumer (i.e. not a business)
  • Have an electricity account with a Supplier

Contact So Eco today to save on your energy bills

Thank you for reading our blog post! We hope you enjoyed it and learned something new. Contact So Eco today for all your insulation and renewable energy needs. Simply fill out our eligibility checker and we’ll get back in touch!


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