Barclays has launched a pilot for its Green Home Reward initiative to support energy efficiency-related home improvements.
The test-and-learn pilot will evaluate the efficacy of a cash reward for driving greener home improvements.
The Greener Home Reward provides up to £2,000 to Barclays residential mortgage customers that register for the cash reward online and then make and pay for a selected home energy efficiency-related improvement.
The lender says no additional lending is required to benefit from the scheme and all new and existing UK residential mortgage customers are eligible.
A TrustMark-registered business or tradesperson must complete the chosen home improvement.
The data and insights collected throughout the pilot will inform Barclays’ product development as it looks to launch future home improvement support measures.
Consumer research from Barclays found that 75% of homeowners intend to make energy-efficient changes to their homes, with 90% hoping to make improvements within five years.
However, 73% of homeowners report needing help to afford energy-efficient upgrades, with 57% believing their mortgage lender should support them.
Over four-fifths (83%) of homeowners report that removing price barriers in the form of a cash reward would be most effective in encouraging them to make these changes.
Barclays Bank group chief executive officer C.S. Venkatakrishnan says: “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 behavioural economist Dr Pete Brooks adds: “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.”
