Thousands of households across England will see energy bills reduced by up to £200 a year as government announces £67 million to install insulation and clean heating.

The funding announced this week forms part of the government’s Home Upgrade Grant (HUG) scheme and will be allocated to local authorities across England to improve up to 4,300 low-income, off-gas grid households – which are reliant on alternatives such as bottled gas and oil to heat their homes.

Grants will pay for energy efficiency measures such as wall and roof insulation as well as new low-carbon heating systems, thermostats and room heating controls, expected to be delivered before the end of March 2023.

The money will help people who are most vulnerable to fuel poverty, who are on low incomes and living in off gas grid privately-owned homes – both rented and owner-occupied – with upgrades helping to reduce their bills and make their homes warmer.

It is the first round of funding from a total of £950 million that was allocated to the HUG scheme by the government last year and will be available over the next 3 years to 2025.

Around 1,300 jobs in the green energy sector will be supported as a result of this latest funding.

Minister Lord Callanan of Business and Energy said, “This funding will make a real difference to thousands of low-income households – saving them up to £200 a year on their energy bills through upgrades like better insulation.”

The £67 million of HUG funding will go to 22 local authorities across England and builds on the Sustainable Warmth Competition in December. Energy efficiency upgrades from funding announced today will be delivered before the end of March 2023.

The funding is part of the £6.6 billion the government is investing this parliament to decarbonise buildings, of which over £2 billion is aimed specifically at lower-income households.

The Government say this will play a significant role in helping the UK to reach its world-leading climate change ambitions and, with upgraded insulation making it easier to keep homes warm, it will save people money on their energy bills.