How the ECO4 Scheme Can Save You Money
With energy bills continuing to rise and environmental concerns growing, many households in the UK are looking for practical ways to reduce their costs while improving energy efficiency. One of the most beneficial and government-supported options available today is the ECO4 scheme.
This initiative, part of the UK government’s broader efforts to reduce carbon emissions and tackle fuel poverty, offers eligible households significant support in making their homes more energy-efficient. From better insulation to modern heating systems, the ECO4 scheme provides long-term solutions that translate into real savings.
Here’s everything you need to know about how the ECO4 scheme can help you cut down on energy expenses—both now and in the future.
What Is the ECO4 Scheme?
The Energy Company Obligation (ECO) is a UK government program designed to make homes warmer, greener, and more affordable to live in. The fourth phase, ECO4, launched in 2022 and will continue through 2026.
The primary aim of ECO4 is to support low-income and vulnerable households by funding energy efficiency upgrades. These improvements not only lower heating bills but also help reduce the overall environmental footprint of a home.
ECO4 builds on the successes of earlier phases of the scheme, but with stricter standards and a more targeted focus on whole-home retrofits. This means instead of offering just a single improvement, ECO4 often covers multiple upgrades to improve the home's overall energy performance.
Who Is Eligible for ECO4?
Eligibility for ECO4 is based on a combination of household income, benefits received, property type, and energy performance. In general, households may qualify if they:
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Receive certain means-tested benefits (e.g., Universal Credit, Income Support, Child Tax Credit, etc.)
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Are classified as low-income under local authority criteria (via the LA Flex route)
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Live in properties with poor energy performance (usually EPC rating D, E, F, or G)
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Are off the gas grid or rely on older, inefficient heating systems
The scheme applies to both homeowners and private tenants (with landlord permission), and in many cases, the upgrades are fully funded, meaning there’s little or no cost to the household.
What Energy Improvements Are Covered?
ECO4 covers a range of energy-saving measures that can make a major difference to how much energy your home uses—and how much you pay for it. Some of the most common improvements include:
1. Loft Insulation
A poorly insulated loft can lead to up to 25% of a home’s heat loss. Adding proper loft insulation helps retain warmth in the winter and keeps your home cooler in the summer, leading to noticeable reductions in heating costs.
2. Cavity Wall Insulation
Many UK homes, especially those built after 1920, have cavity walls that allow heat to escape. Filling these walls with insulation significantly reduces energy waste, improving indoor comfort and cutting heating bills.
3. Solid Wall Insulation
For older homes without cavity walls, internal or external solid wall insulation can be added to prevent heat loss. Although these upgrades tend to be more costly, ECO4 funding can cover a large portion—if not all—of the cost.
4. Heating System Upgrades
Replacing outdated, inefficient boilers or electric heaters with modern systems like first-time central heating, condensing boilers, or electric storage heaters helps lower running costs and emissions.
5. Renewable Energy Options
In off-gas areas, ECO4 may fund solar panels or heat pumps, helping households generate their own electricity and become less dependent on the national grid.
6. Ventilation Improvements
To support insulation upgrades and avoid condensation or damp issues, the scheme often includes the installation of extract fans or trickle vents, improving air quality and preventing mold growth.
How ECO4 Saves You Money
Energy-efficient upgrades provided under ECO4 result in real-world financial benefits. Here’s how:
Lower Energy Bills
Insulation, efficient heating, and renewable energy systems reduce the amount of energy required to heat and power your home. According to government data, proper insulation alone can cut annual heating bills by £200–£400.
Reduced Maintenance Costs
Older heating systems and poorly insulated homes often lead to issues like boiler breakdowns, damp problems, and mold. Energy-efficient upgrades reduce these risks, lowering repair and maintenance expenses over time.
Protection Against Energy Price Hikes
Making your home more energy-efficient protects you from volatile gas and electricity prices. With better insulation and efficient heating, your reliance on expensive energy sources decreases.
Increase in Property Value
Homes with high energy efficiency ratings are more attractive to buyers and tenants. ECO4 upgrades can increase your home’s Energy Performance Certificate (EPC) rating, boosting its value and marketability.
Long-Term Sustainability
Investing in energy efficiency today pays off for years to come. While some savings are immediate, many households continue to enjoy reduced bills and improved comfort for 10 to 25 years after the upgrades.
Step-by-Step: How the Process Works
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Eligibility Check
A professional survey is conducted to assess whether the household qualifies for ECO4. This includes checking benefits, income, and the current energy rating of the property. -
Home Survey
An energy assessor visits the property to determine what improvements are needed and what measures the scheme can fund. -
Installation of Upgrades
Qualified professionals carry out the approved installations. This can range from installing insulation to replacing a heating system or fitting solar panels. -
Post-Installation Review
A follow-up ensures the work meets required standards and the property’s EPC rating is improved.
What If You Don’t Receive Benefits?
Even if you're not on benefits, you may still qualify through the LA Flex route. This allows local authorities to approve funding for households that are struggling with fuel costs or living in hard-to-heat homes. Many councils have set income thresholds or health-related criteria that make it easier to access support.
Final Thoughts
The ECO4 scheme represents a golden opportunity for eligible households to improve the energy efficiency of their homes at no or very little cost. From reducing your monthly energy bills to increasing your property’s value and comfort, the benefits are substantial and long-lasting.
As energy costs continue to rise, the upgrades made under ECO4 provide a much-needed financial cushion 0ne that also helps the environment by reducing carbon emissions.
If your household is struggling with high energy bills, it’s well worth exploring whether you’re eligible for support under the ECO4 scheme. The savings can add up quickly—and last for years.