The government’s flagship energy-efficiency programme, ECO4, is supposed to help low-income homes cut bills by fitting insulation. Instead, industry experts are calling for a Serious Fraud Office investigation after what one described as a ‘catastrophic failure’. For UK homeowners, the fallout could mean wasted money, cold homes, and a deeper distrust of schemes meant to help.
As reported by Construction News, the criticisms centre on poor installation quality, alleged overcharging, and a lack of proper oversight. The scheme, which replaced the earlier ECO3 programme in 2022, is funded by energy companies through the Energy Company Obligation. It targets homes with low EPC ratings, typically D or below, offering free or heavily subsidised cavity wall, loft, and solid wall insulation.
But the gap between promise and delivery is wide. Installers have reportedly rushed jobs, used substandard materials, and left homes with damp and mould. In some cases, insulation was fitted where it could not work, cavity walls with rubble or debris, lofts already filled with old insulation. The result: higher bills, not lower.
Who qualifies, and who doesn’t
ECO4 is available to households receiving certain benefits, Universal Credit, Pension Credit, Child Tax Credit, or those referred by local authorities via the Great British Insulation Scheme. The idea is simple: the energy supplier pays for the work, and the householder pays nothing. But the reality is messier.
Some homeowners report being told they qualify, only to wait months for an assessment, then more months for installation. Others find that the installer’s definition of ‘insulation’ differs sharply from their own. A typical 3-bed semi might get loft rolls laid across joists, but if the installer skips the edges or fails to seal gaps, the thermal performance drops by 20% or more. That matters because a poorly insulated loft can lose up to a quarter of a home’s heat, roughly £100-£150 a year on a gas bill averaging £1,800.
The Energy Saving Trust estimates that proper loft insulation (270mm depth) saves around £200 a year for a detached house, but only if installed correctly. With ECO4, the savings may be smaller, or nonexistent, if the work is botched.
What this means for your EPC
Your Energy Performance Certificate is the document that tells you, and potential buyers, how energy-efficient your home is. A good EPC (C or above) can add thousands to a home’s value; a poor one (E, F, or G) can make it unsellable. Insulation is the cheapest way to improve your EPC score, often lifting a D to a C or a C to a B.
But if the insulation is fitted badly, the EPC assessor may not be able to verify it. The EPC relies on assumed performance values for insulation, but if the assessor sees gaps, damp patches, or missing sections, they will downgrade the rating. That means you pay for the work but get no EPC benefit, and no resale value uplift.
Ofgem, which oversees ECO4, has promised to tighten enforcement. But critics say the damage is already done. The scheme’s budget, around £1 billion over four years, is large enough to attract unscrupulous contractors, and the oversight is too thin to catch them all.
What you can do now
If you are considering ECO4 insulation, or have already had it done, take these steps:
- Check the installer is registered with TrustMark, the government-endorsed quality scheme. Ask for references and photos of similar work.
- Get a written guarantee, typically 10 years for cavity wall insulation, 25 years for solid wall. If the installer won’t provide one, walk away.
- Inspect the work yourself or ask a surveyor. Look for even coverage, no gaps at edges, and no damp patches after rain.
- Report problems to Ofgem (via their website) or the Citizens Advice consumer helpline. If you suspect fraud, contact Action Fraud.
The government has not yet responded to the calls for a Serious Fraud Office probe. But for homeowners, the lesson is clear: even a free scheme carries risks if you don’t check the work. A bad insulation job can leave you colder, poorer, and stuck with a home that nobody wants to buy.
Check your EPC rating on gov.uk. If it’s D or below, you may qualify for ECO4 or the Great British Insulation Scheme. But before you sign anything, verify the installer. A little due diligence now can save you years of regret.
Frequently Asked Questions
No. ECO4 is mainly for low-income households receiving certain benefits or referred by local authorities. Private homeowners who don't qualify can still access the Great British Insulation Scheme, which offers subsidies but not full funding.
Contact the installer first to request a remedy. If they refuse, report the issue to Ofgem's ECO4 team via their website. You can also complain to the Energy Ombudsman if the installer is a member of a redress scheme. For suspected fraud, contact Action Fraud on 0300 123 2040.
