Energy debt in the UK has reached a new record high of £4.79 billion, a 5% increase on the previous quarter, according to Ofgem, the energy regulator. The figures come ahead of a 13% rise in the price cap from July 1, with forecasts suggesting the cap will remain at similar levels from October 1.
Debt Repayment and Arrears on the Rise
The number of accounts repaying debt has increased by 3% for electricity, reaching 852,000, and by 4% for gas, reaching 710,000. Average debt among those with a repayment arrangement has risen by 4% for both electricity, to £828, and gas, to £679. For those without a repayment plan, average arrears are nearly double: £1,876 for electricity and £1,623 for gas.
Total debt and arrears in England, Wales, and Scotland have risen by 15% over the past year, Ofgem said. The data, updated quarterly, covers the period from January to the end of March and includes energy customers who have been in debt for more than three months.
Industry-Wide Issue Demands Coordinated Action
Ofgem’s director general of markets, Neil Kenward, said: “Energy debt is continuing to rise, putting pressure on households facing the stress of debt, increasing costs for bill payers, and limiting the industry’s ability to invest and innovate. This is a complex, industry-wide issue, that needs to be addressed with a balanced and coordinated programme of activity across the industry, including from Ofgem, Government, suppliers, and community groups and charities in order to stabilise debt levels.”
Charities Warn of Soaring Debt and Hardship
Gillian Cooper, director of energy at Citizens Advice, said: “It is extremely worrying that energy debt has again grown to record levels, but it’s not a surprise. At Citizens Advice, we’ve seen a staggering 70% increase in the number of households we support with energy debt since 2021. Soaring debt is hurting vulnerable households and ultimately driving up the costs of everyone’s bills.”
James Mabey, policy analyst at National Energy Action, added: “It is deeply worrying that Ofgem’s latest figures show energy debt has risen again to a new record high. For the households National Energy Action supports, the consequences of energy debt include cold homes, rising anxiety and impossible choices about essentials. This debt has built up because bills have gone beyond what many low-income households can afford, and its effects are not limited to those already in arrears. Allowing debt to persist builds additional costs into future price caps, while also increasing the risk of more harmful responses such as households having prepayment meters forcibly installed.”
