The Autumn Budget 2025 committed £1.8 billion to the Energy Company Obligation (ECO4) scheme, a figure that will directly fund insulation, heating upgrades, and solar panels for the UK’s most energy-inefficient homes. For the 6.5 million households living in fuel poverty, this is not policy jargon. It is the difference between a warm winter and a choice between heating and eating.
As reported by E3G, the budget extends the scheme until March 2027, with a focus on properties rated EPC D or below. That covers roughly 40% of England’s housing stock, homes that leak heat at three times the rate of a modern EPC C property.
Who qualifies, and who doesn’t
ECO4 targets households on means-tested benefits, including Universal Credit, Pension Credit, and Child Tax Credit. Landlords can also apply for rented properties, provided tenants meet eligibility criteria. Owner-occupiers in fuel poverty without benefits may still qualify via local authority referral routes.
The catch is capacity. Installers have reported 12-week waiting lists in some regions. Ofgem, which administers the scheme, confirmed to the Energy Saving Trust that demand has outstripped supply since the scheme launched in 2022. The new funding will help, but households should apply early, and be prepared to wait.
What it costs a typical 3-bed semi
For a qualifying household, ECO4 covers 100% of the cost for cavity wall insulation, loft insulation, and underfloor insulation. A heat pump installation typically costs the supplier £7,000–£12,000, but the household pays nothing. Solar panels (up to 3.5 kW) are also fully funded for homes with electric heating or poor EPC ratings.
The savings are concrete. The Energy Saving Trust estimates that cavity wall insulation alone saves a typical 3-bed semi £250–£400 per year. Combined with loft insulation and a heat pump, annual bills can drop by £600–£900. That is real money, especially when the price cap is forecast to rise again in January 2026.
What this misses
Yet the budget leaves a gap. The £1.8bn covers only low-income households. For the 15 million homes in EPC D or below that do not qualify, there is no new grant programme. The Great British Insulation Scheme, which offers partial subsidies, remains capped at £1,500 per property, rarely enough for a full retrofit.
Homeowners outside ECO4 should consider the Boiler Upgrade Scheme (offering £7,500 for heat pumps) and the Energy Company Obligation’s flexible eligibility routes. Local councils also run top-up schemes in areas with high fuel poverty. The key is to act before the next bidding window closes, typically every quarter.
Households on standard variable tariffs should check eligibility through gov.uk/eco4 from 1 December 2025. Applications close on 31 March 2027. For those who miss out, the Boiler Upgrade Scheme and local authority grants remain open, but the clock is ticking.
Frequently Asked Questions
For qualifying households, ECO4 covers 100% of the cost for cavity wall insulation, loft insulation, underfloor insulation, heat pumps (typically £7,000–£12,000), and solar panels up to 3.5 kW. The household pays nothing, and typical annual savings range from £600 to £900 on energy bills.
ECO4 targets households on means-tested benefits like Universal Credit, Pension Credit, and Child Tax Credit. Landlords can apply for rented properties if tenants qualify, and owner-occupiers in fuel poverty without benefits may still qualify via local authority referral routes.
The Autumn Budget 2025 extended ECO4 until March 2027. Applications close on 31 March 2027, and households should apply early via gov.uk/eco4 from 1 December 2025 due to 12-week waiting lists in some regions.
Homeowners who don't qualify can use the Boiler Upgrade Scheme, which offers £7,500 for heat pumps, or the Great British Insulation Scheme with partial subsidies up to £1,500 per property. Local councils also run top-up schemes in high fuel poverty areas, with bidding windows typically closing every quarter.
Cavity wall insulation alone saves a typical 3-bed semi £250–£400 per year, according to the Energy Saving Trust. Combined with loft insulation and a heat pump, annual bills can drop by £600–£900, which is significant given the energy price cap is forecast to rise in January 2026.
