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UK Energy Debt Hits Record £4.4bn as Households Struggle with Bills

UK Energy Debt Hits Record £4.4bn
Image Source: By Getty Images

Household debt to energy suppliers has climbed to a record £4.4bn, according to new figures from the regulator Ofgem, raising concerns about the financial pressure many families continue to face.

The amount owed has risen by more than £750m in the past year across England, Scotland and Wales, with more than one million households now in arrears without any repayment plan in place — also a record high.

Mounting pressure on households

The sharp rise in debt follows years of surging energy prices that left many households unable to keep up with bills. While costs have fallen from their post-Covid and Ukraine war peaks, prices remain relatively high, leaving some consumers unable to pay both current bills and older arrears.

Ofgem’s data, covering April to June, shows average debt for households without a repayment plan now stands at £1,716.

Regulator considers new support

The regulator said it was looking at ways to help tackle the problem, including a proposed Debt Relief Support Scheme that could see suppliers write off unpayable debt or match customer repayments to help clear balances more quickly.

Any scheme would likely be funded through everyone’s bills, spreading the cost across all customers. Ofgem also wants to make it easier for households to access help from charities and debt agencies, while ensuring suppliers adopt a consistent approach to managing arrears.

Long-term challenges

The regulator has warned that the rise in debt poses risks to the stability of the energy market if not addressed.

“The growth of energy debt is unsustainable and solutions are urgently needed,” an Ofgem spokesperson said earlier this week, adding that proposals would be developed in consultation with industry, consumer groups and government.

Campaigners have said the crisis highlights the need for longer-term reforms to shield vulnerable households from volatile energy costs, with some charities calling for targeted debt relief funded by the government rather than consumers.

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