The move is part of a £3bn green investment package the Government says will help support about 140,000 green jobs and upgrade buildings and reduce emissions.

As part of this package homeowners and landlords in England will be able to apply for vouchers from a £2bn Green Homes Grant scheme to pay for green improvements such as loft, wall and floor insulation.

The vouchers will be worth up to £5,000 per household and up to £10,000 for the poorest households. They will fund two thirds of work done. For example, a household getting £6,000 worth of energy improvement work done could get a voucher for £4,000.

The Government says these improvements could save some households hundreds of pounds a year on their energy bills while creating thousands of jobs for tradespeople.

The remaining £1bn of the £3bn programme will make public buildings, including schools and hospitals, greener, helping the country meet its ambitions of achieving Net Zero by 2050.

Peter Earl, head of energy at Compare the Market.com, says: “Building greener homes is an essential part of creating a more sustainable future, and this grant is a tentative step in the right direction.

“Lower household bills, annual savings for millions of households, and a greater focus on measures that help our planet are all welcome news for households across the UK. However, it’s important to put the amount pledged into context; whilst it is enough to upgrade 650,000 homes, this only represents 2% of all households in the UK.”

Alicia Kennedy, director of Generation Rent, says the Green Homes Grant could make a huge difference to the quarter of private rentals that are non-decent.

“Renters are more likely than home owners to live in an inefficient home, but if they are going to benefit, the government must make it easy for renters to request improvements.

“Because enforcement of standards is so patchy, landlords don’t have much incentive to insulate their homes, so renters need the right support to make the most of this scheme and pay less for their heating.”

The Green Homes Grant will launch in September, with online applications for recommended energy efficiency measures, and details of accredited local suppliers.