The Energy Company Obligation (ECO4) is the fourth phase of a UK government scheme that requires larger energy suppliers to fund energy-efficiency improvements for low-income and vulnerable households, targeting an average saving of around £300 per year on heating bills (GOV.UK, 2026).
ECO4 runs from 2022 to 2026 and focuses on whole-house upgrades, meaning it funds multiple measures together, like insulation, a new boiler, or a heat pump, rather than single fixes. It applies to owner-occupiers and private tenants in England, Scotland, and Wales who receive certain benefits or have a low income. Landlords can also apply for eligible properties. The scheme does not cover new-build homes or households already receiving similar support through other programmes.
Eligibility depends on benefits or income
To qualify for ECO4, you or someone in your household must receive a qualifying benefit, such as Universal Credit, Pension Credit, or Child Tax Credit, or have a gross annual income below £31,000 (Ofgem, 2026). The property must also have an Energy Performance Certificate (EPC) rating of D, E, F, or G. Homeowners and private tenants can apply through their energy supplier or a local installer registered with TrustMark, which ensures work meets quality standards (TrustMark, 2026).
Funding covers insulation, heating and renewables
ECO4 typically covers 100% of the cost for eligible households, with no upfront payment required. Common measures include loft insulation, cavity wall insulation, solid wall insulation, and upgrading to an A-rated gas boiler or an air-source heat pump. For example, installing loft insulation can save around £225 per year, while cavity wall insulation saves roughly £300 per year (Energy Saving Trust, 2026). The scheme also supports solar panels if combined with other measures.
How to apply and what to expect
You apply by contacting your energy supplier or a government-approved installer listed on the TrustMark website. The supplier will arrange a free assessment to check your home’s eligibility and recommend upgrades. Installation is typically completed within 4-8 weeks, and you do not need to pay anything if you meet the criteria. If you are a tenant, your landlord must give permission, but they cannot charge you for the work (GOV.UK, 2026).
A worked example
A typical 1930s semi-detached house in Manchester with an EPC rating of E could see total upgrade costs of £18,000 before grants, reducing to around £1,500 after the £7,500 BUS grant and ECO4 funding for a full package of loft insulation, cavity wall insulation, and an air-source heat pump. The Energy Saving Trust estimates this combination saves roughly £1,100 per year on heating bills. With the 0% VAT rate on energy-saving materials running until March 2027, the upfront cost becomes even more manageable. The payback period sits at just over one year when considering the heavily subsidised installation. Over 25 years, the total savings on energy bills reach approximately £27,500, assuming a 3% annual rise in energy costs. This makes ECO4 one of the most cost-effective programmes for older, draughty homes across the UK.
| Item | Figure |
|---|---|
| Upfront cost after grants | £1,500 |
| Yearly savings | £1,100 |
| Payback period | 1.4 years |
| 25-year lifetime savings | £27,500 |
What homeowners often get wrong
The most common mistake is assuming ECO4 covers single measures like a boiler swap, when it actually requires whole-house upgrades that bundle multiple improvements together. Here are three frequent errors that cost homeowners money or disqualify them from funding.
- Believing you can pick and choose measures ECO4 is not a menu of options; it funds a package of insulation, heating, and ventilation improvements based on a whole-house assessment. Choosing just one measure, such as a heat pump, can void your eligibility and leave you paying full price for separate installations.
- Thinking the scheme is only for homeowners Private tenants in England, Scotland, and Wales can also apply if their landlord agrees and the property has an EPC of D or below. Many tenants miss out on free upgrades worth thousands of pounds because they assume they must own the property.
- Ignoring the EPC requirement Your home must have a valid Energy Performance Certificate rated D, E, F, or G before you apply. Without one, your supplier cannot assess eligibility, and you could waste weeks of time arranging surveys that lead nowhere.
Quick reference
- ECO4 runs from 2022 to 2026 and requires your property to have an EPC rating of D, E, F, or G to qualify.
- Eligible households save roughly £300 per year on heating bills according to GOV.UK, but whole-house upgrades can push savings above £1,000 annually.
- You must receive a qualifying benefit such as Universal Credit, Pension Credit, or Child Tax Credit, or have a gross household income below £31,000 per year.
- Funding covers multiple measures together, including loft insulation, cavity wall insulation, air-source heat pumps, and solar panels, but not single boiler replacements.
- All work must be carried out by a TrustMark-registered installer to maintain your warranty and avoid invalidating the grant.
Frequently Asked Questions
ECO4 covers whole-house energy efficiency upgrades including loft insulation, cavity wall insulation, new boilers, and heat pumps. According to Ofgem, it funds multiple measures together rather than single fixes.
You qualify for ECO4 if you receive benefits like Universal Credit or Pension Credit, or have a gross annual income below £31,000. The property must have an EPC rating of D to G, as confirmed by GOV.UK.
Yes, ECO4 can replace an old boiler with a new A-rated one at no cost for eligible households. The Energy Saving Trust notes this is part of the scheme's whole-house upgrade approach.
