Energy usage is a top priority for many households, three quarters (75%) of homeowners intend to make energy efficiency-related changes to their homes, with the vast majority (90%) hoping to make improvements within five years.

Despite these intentions, new research from Barclays reveals that the cost is a prohibitive barrier, with homeowners favouring smaller-scale lifestyle changes over larger, structural ones.

As the cost-of-living crisis continues to squeeze household finances and 73% of respondents report being unable to afford energy efficiency-related changes, Barclays is trialling a ‘test-and-learn’ cash reward initiative to help reduce the real and perceived barriers for homeowners, to see if this results in a greater uptake of greener home improvements.

New initiatives are needed to drive change

With the majority of homeowners (57%) saying they believe their mortgage provider should help them to make energy efficiency-related home improvements, Barclays is combining behavioural science with consumer research to inform its support for customers. Over four fifths (83%) of homeowners report that the removal of price barriers in the form of a cash reward would be most effective in encouraging them to make changes. In response, Barclays today announces the launch of its Greener Home Reward scheme to encourage homeowners to make their intentions a reality.

The Greener Home Reward provides up to £2,000 to Barclays UK residential mortgage customers that register for the cash reward online and then make and pay for a selected home energy efficiency-related improvement. No additional lending is required to benefit from the scheme and all new and existing Barclays UK residential mortgage customers are eligible.

Customers can choose to install any one of several home improvements, including an air-source heat pump, double or triple-glazed windows, solar panels, or home insulation. The chosen home improvement must be completed by a TrustMark-registered business or tradesperson – TrustMark is the Government-endorsed quality scheme that covers work consumers choose to have carried out in or around their home.

The data and insights collected throughout the pilot will inform Barclays’ product development as it looks to roll-out wider home improvement support measures in the future.

A full breakdown of the support available

C.S. Venkatakrishnan, Group CEO, Barclays Bank, commented: “There is a clear need to improve the energy efficiency of UK housing, but as our data indicates, cost remains a barrier to turning desire into action.

“We hope this pilot will go some way towards encouraging consumers to make energy efficiency-related home improvements.”

Dr Pete Brooks, Barclays behavioural economist, added: “When weighing up the costs and benefits of retrofitting, a behavioural bias called ‘hyperbolic discounting’ often comes into play, which in essence means that we tend to prefer smaller, immediate rewards over larger payoffs further down the line.

“With the expected payback period for some home improvements clocking in at over a decade, these larger options may be overlooked. Even if the long-term benefits might be greater, the end result is often inaction.

Mr Brooks continued: “To overcome this, our latest initiative helps provide a more immediate reward to our residential mortgage customers to help with the cost of making energy efficiency-related home improvements.

“Couple this with providing helpful information to consumers to help them make informed choices and we hope to encourage more people to overcome their human biases.”

More information about the Greener Home Reward can also be accessed via the hub: barclays.co.uk/sustainability