As households continue to feel the impact of the ongoing cost-of-living crisis, Barclays has launched a new initiative aimed at assisting mortgage customers with up to £2,000 toward energy-efficient home improvements.
The Greener Home Reward program offers financial support to those who make specific enhancements to their homes, such as installing air-source heat pumps, double or triple-glazed windows, solar panels, or upgrading insulation. This pilot program not only supports customers directly but also enables Barclays to gather valuable data and insights for future product development and expanded support initiatives.
In a related move earlier this month, Lloyds Banking Group partnered with Octopus Energy to provide mortgage customers with a £1,000 cashback incentive when they increase their mortgage to cover the costs associated with installing air-source heat pumps.
Barclays believes that the immediate financial incentive will help alleviate the hesitance many homeowners face regarding the substantial upfront costs and long payback periods often associated with significant energy efficiency improvements.
Dr. Pete Brooks, a behavioral economist at Barclays, explained, “When evaluating the trade-offs of retrofitting, a cognitive bias known as ‘hyperbolic discounting’ can influence decision-making, leading individuals to favor smaller, immediate rewards over larger, long-term benefits. The expected payback period for some enhancements may extend beyond a decade, causing many to overlook these options, despite potentially greater long-term advantages. Our initiative aims to provide an immediate reward for our residential mortgage customers to aid in the costs of energy-efficient upgrades. By pairing this reward with informative resources, we hope to empower more consumers to make informed decisions and counteract their inherent biases.”
In conjunction with this initiative, Barclays will also launch a new Sustainability Hub for retail customers that focuses on educational materials related to sustainable living, including ‘Greener Homes’ and ‘Greener Travel.’ Over time, this hub will expand to include a variety of tools, resources, and content addressing a broad spectrum of sustainability topics, according to the bank.
For further details and updates, please visit the link provided regarding Finextra’s fifth Sustainable Finance Live conference and hackathon, scheduled for November 29.