Barclays to pay its mortgage holders up to £2,000 in new trial

Three out of four people said they cannot afford to make the energy efficiency changes they would like to make within the next five years, according to the bank's survey.

The bank will run a trial which involves paying back customers who installed new insulation, heat pumps or solar panels, among other solutions.

It comes as the bank's survey revealed that most of the homeowners it surveyed wanted to improve the energy efficiency of their homes.

Barclays to pay its mortgage holders up to £2000 in new trial 

Barclays to pay its mortgage holders up to £2000 in new trial ( PA) (Image: PA)

However, most respondents also noted that could currently only make small-scale improvements which do not cost much upfront.

The small-scale improvements include the likes of changing old light bulbs to more energy-efficient versions which is something that has only a small impact on a home’s carbon emissions.

Barclays chief executive C.S. Venkatakrishnan said:“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.”

Barclays has said that the work will be performed by a business or tradesperson that is registered under the Government-backed scheme, TrustMark.

The data collected by the bank from the pilot will be used to help the roll-out of wider home improvement support measures in the future.

The best way to encourage more energy efficiency improvements in people’s homes was simply to give them cash to do so, according to the bank's initial research.

The cost was reported as the main obstacle holding people back from making the chances with 73% of homeowners from retrofitting their houses, and 56% of people saying that they do not have enough cash upfront at all.

Around a quarter of people said that the payback period on the investment puts them off spending the cash upfront.

• READ MORE: UK drivers warned about £2,500 fine for breaking 7 winter driving laws 
• READ MORE: Barclays issues Black Friday and Cyber Monday warning about scams

Dr Pete Brooks, a behavioural economist at Barclays, said: “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.”

Customers will able to claim the £2000 for their homes when installing heat pumps. 

Those who wish to get solid wall insulation or solar panels will be able to claim £1000.

Meanwhile, a smaller £500 payment will also be available for loft insulation or new windows, among other initiatives.