The amount of money owed to energy suppliers in the UK has soared to a record £4.4 billion, according to new figures released by Ofgem. The regulator revealed that energy debt in England, Wales and Scotland rose by more than £750 million compared with the same period last year, highlighting the growing financial strain on households.
Data covering April to June shows that more than one million households have no repayment arrangement in place for their energy debt — another record high. Average arrears for customers without repayment plans now stand at £1,716 per household.
Ofgem Considers Debt Relief Support Scheme
In response, Ofgem is weighing new measures to curb unsustainable debt levels. Proposals include a Debt Relief Support Scheme that would allow energy suppliers to write off debts unlikely to be repaid or to “debt match” payments made by customers to clear outstanding balances more quickly. The regulator confirmed that any such scheme would need to be funded through energy bills shared across all customers.
Rising Costs and Struggling Households
The surge in energy debt comes despite energy prices falling from their post-Covid peak. Prices remain relatively high, however, leaving many families unable to pay their current bills while also carrying arrears from previous months and years. Ofgem has stressed the need to make it easier for consumers to access support from charities and debt advice agencies while ensuring a consistent nationwide approach.
Cost of Living Pressures Remain
Energy debt has become a key part of the broader cost of living crisis, which has forced millions of households into financial hardship. Although the government previously offered cost of living payments, the regulator warns that new action is required to prevent household energy debt from spiralling further.
