Help to Buy Mostly Helped High Earners, IFS Finds – What It Means for Household Finances

What's Happening

A new analysis by the Institute for Fiscal Studies (IFS), one of the UK's most respected independent economic research bodies, has concluded that the government's Help to Buy equity loan scheme – which ran in England from 2013 to 2023 – disproportionately benefited higher-earning households.

The scheme was designed to help people, particularly first-time buyers, purchase new-build homes by offering a government equity loan of up to 20% of the property value (40% in London), reducing the size of mortgage deposit required. However, the IFS analysis suggests that in practice, those who took advantage of the scheme were more likely to be on higher incomes – people who, in many cases, could have bought a home without government assistance anyway.

The findings raise significant questions about the value for money of the scheme for taxpayers, and whether housing policy in the UK has done enough to support those on lower and middle incomes who face the steepest barriers to homeownership. Help to Buy closed to new applicants in October 2022, with final completions completed by March 2023.

What This Means for Household Energy Bills

At first glance, a report about a housing scheme might seem unrelated to energy bills. But housing affordability and energy costs are closely linked for UK households.

When a significant portion of household income is consumed by mortgage repayments or rent – a situation that has worsened as house prices have risen faster than wages – there is simply less money left over to cover other essentials, including energy. For households already stretched by housing costs, even modest increases in energy bills can tip budgets into the red.

There is also a structural dimension. Lower-income households are more likely to live in older, less energy-efficient properties – homes with poor insulation, draughty windows, and ageing boilers. These homes cost more to heat, meaning energy bills are higher even before accounting for price rises. Homeowners, particularly those who bought newer properties (the type Help to Buy was linked to), often benefit from better energy efficiency ratings, lower running costs, and access to green home improvement schemes.

The IFS findings suggest that housing policy has not done enough to help lower-income households access better-quality, more energy-efficient homes – leaving them exposed to both higher housing costs and higher energy bills simultaneously.

Who Is Affected

Renters and lower-income households are most exposed to the combined pressures of housing unaffordability and high energy costs. Without access to homeownership, renters have limited control over the energy efficiency of their homes and may be unable to install insulation, heat pumps, or solar panels.

First-time buyers on modest incomes who were unable to benefit from Help to Buy – or who found the scheme did not stretch far enough in high-cost areas – may still be renting or living in less efficient properties.

Households in older housing stock face higher energy costs regardless of income, but those with less financial headroom feel the impact most acutely.

Taxpayers broadly have an interest in whether government housing schemes deliver value for money and genuinely support those who need help most.

What You Can Do Now

While broader housing policy is outside any individual's control, there are practical steps you can take to manage your household energy costs:

1. Compare and switch energy tariffs. With the energy market stabilising after the volatility of recent years, fixed-rate deals are returning. Comparing tariffs regularly can save you money. Use Taupia to check whether you could be on a better deal.

1. Check your eligibility for support schemes. The Warm Home Discount provides eligible low-income households with a £150 rebate on their electricity bill each winter. The Energy Company Obligation (ECO4) scheme funds insulation and heating upgrades for qualifying households. Contact your local council or energy supplier to find out what you may be entitled to.

1. Improve your home's energy efficiency where possible. Even small changes – draught-proofing doors and windows, switching to LED bulbs, and turning down your thermostat by one degree – can meaningfully reduce bills. If you own your home, look into government grants for insulation or heat pump installation.

1. Review your standing charges and usage. Check whether your current tariff structure suits your usage patterns. Some households benefit from time-of-use tariffs, particularly if they have an electric vehicle or can shift usage to off-peak hours.

1. Seek debt advice if needed. If you are struggling to pay energy bills alongside housing costs, organisations such as Citizens Advice, StepChange, and National Debtline offer free, confidential support.

The IFS analysis of Help to Buy is a reminder that housing and energy policy are deeply interconnected. Until the UK builds enough affordable, energy-efficient homes accessible to people on all incomes, many households will continue to face a difficult balancing act between keeping a roof over their heads and keeping the lights on.