ECO4 Scheme Problems: What You Need to Know

What is ECO4?

ECO4 (Energy Company Obligation 4) is a government scheme that requires medium and large energy suppliers to fund energy efficiency improvements, aimed at low-income households in homes with poor energy efficiency ratings. It is paid for through energy bills rather than general taxation. ECO4 started in April 2022 and was extended to 31 December 2026. It is now winding down, and the government has said no successor supplier obligation will follow. By March 2025, 243,900 homes had been upgraded under ECO4.

Measures funded under ECO4 include:

• External wall insulation (EWI)
• Internal wall insulation (IWI)
• Cavity wall insulation
• Loft and room-in-roof insulation
• Heating upgrades, such as replacing or repairing a boiler

There is no central application. gov.uk advises contacting your local council or an energy supplier. Whether work is still available depends on suppliers, and installations must be finished by 31 December 2026.

What the Official Reports Found

On 14 October 2025 the National Audit Office (NAO) published Energy efficiency installations under the Energy Company Obligation (HC 1334). It drew on audits of 758 homes with external or internal wall insulation fitted under ECO4 and GBIS before mid-January 2025. The audits took place between June and August 2025.

• External wall insulation: 98% of homes had major issues requiring remediation (between 22,000 and 23,000 homes). 92% had issues affecting the insulation's performance, often creating a risk of water ingress and mould, and 6% had health and safety risks needing immediate correction, such as inadequate ventilation.
• Internal wall insulation: 29% of homes had major issues (between 9,000 and 13,000 homes), with around 2–3% having health and safety risks.
• Repair costs: normally between £250 and £18,000 per property. The original installer is liable for the cost.
• Slow repairs: by mid-September 2025, 2,934 homes with major issues had been fully fixed.

On 23 January 2026 the House of Commons Public Accounts Committee (HC 1229) called this a "clear and catastrophic failure" and estimated that 32,000 to 35,000 homes are likely to be affected. The Permanent Secretary at the Department for Energy Security and Net Zero told the Committee there were "serious failings at every level of the system that are systemic."

Common ECO4 Problems

Damp and Mould

Wall insulation that is badly installed or poorly detailed can let water in or trap moisture, which can lead to:

• Black mould growth on interior walls
• Damp patches and staining
• Musty odours
• Deteriorating plaster and decoration
• Risks to health — see the government's damp and mould health guidance

Condensation

Gaps in insulation, or poor ventilation after insulating, can cause:

• Excessive condensation on windows
• Water pooling on sills
• Streaming walls during cold weather
• Rotting window frames

Wider Damage

Where moisture is left untreated, it can cause:

• Damage to the underlying wall
• Timber rot
• Water damage to ceilings, carpets and decoration

The Public Accounts Committee noted that some households were left without central heating over winter or had to find somewhere else to stay.

Why Did This Happen?

The Public Accounts Committee and the NAO pointed to several causes:

• A fragmented system: the schemes and the quality assurance system behind them were "too layered, fragmented and complicated", with unclear responsibilities.
• Problems spotted late: installations began in 2022, but TrustMark only told the department about high levels of non-compliant external wall insulation in October 2024.
• Checks not independent: when the Committee reported, there was still no requirement for the retrofit coordinator to be independent of the installer.
• Fraud risk: the department did not complete a full fraud risk assessment before ECO4 began. Ofgem estimated falsified claims on 5,600 to 16,500 homes.
• Installers avoiding repairs: the NAO reported that some company directors were closing and restarting businesses to avoid remediation responsibilities.

Your Options

Immediate Steps

1. Document everything: take photos, note dates, and keep all paperwork and correspondence.
2. External wall insulation: book TrustMark's free Find & Fix audit on 0333 555 1234 (option 1). See our guide to the free audit.
3. Internal wall insulation: raise concerns with Ofgem's ECO contact centre on 0808 169 4447 or ECOhelp@ofgem.gov.uk.
4. Other ECO4 measures: complain in writing to the installer, then to its TrustMark Scheme Provider, then to the Dispute Resolution Ombudsman.

You should not be asked to pay for repairs to faulty scheme work. Anyone contacting you about the audit should be able to quote the Unique Measure Reference Number from your Ofgem letter.

Who Pays, and What Is Not Covered

There is no government compensation scheme. Repairs are paid for in this order:

• The original installer, which is liable for fixing the work
• The 25-year guarantee, if the installer has stopped trading or will not fix it — up to £20,000, or £25,000 for Installation Assurance Authority guarantees since 17 June 2026
• The National Energy Foundation, for some homes where the installer has gone and the guarantee was cancelled, fraudulent or missing (ask TrustMark or Ofgem's ECO helpline)

The guarantees do not cover ill health, damaged belongings or loss of earnings. For losses like these, get independent advice, for example from the Citizens Advice consumer helpline on 0808 223 1133.

Where We Fit In

Insulation Crisis Help is an advice and introduction service run by Better Home Hub Ltd. We do not handle complaints or claims.

• Free routes first: if the Find & Fix audit, Ofgem or a guarantee covers your home, use that.
• Specialist introductions: if no free route applies, you can send us an enquiry and we may introduce you to a specialist, who may pay Better Home Hub a fee. Any survey or work is agreed and paid for between you and them.
• Check them yourself: confirm any specialist's registration, insurance and guarantee, for example on TrustMark's register.