Households across Britain could save around £130 on their energy bills under new plans announced by Ofgem and the Government. The energy regulator has unveiled a strategy to tackle rising energy debt, which has now reached £5 billion across Great Britain.
The plans could save a typical household around £130 over the next 10 years, according to Government analysis. The savings would come from reducing the costs of unpaid energy bills, which are currently passed on to other customers.
Support for vulnerable customers
The strategy, announced on October 29, will also help people struggling with energy debt built up during the 2022 to 2024 energy crisis. However, not everyone will qualify, and the amount of debt eventually written off will depend on customers engaging with their energy suppliers.
The scheme will include support for pensioners, people receiving disability benefits and those on means-tested benefits who meet the eligibility requirements. Ofgem is also looking at changes to how households pay their energy bills, including greater use of smart pay-as-you-go meters.
Wider measures and prevention
The regulator said changes to payment methods and the process of setting up energy accounts when moving home could save households almost £30 by 2030. Ofgem will also review rules around involuntary prepayment meters and look at ways to make it easier for people moving home to avoid unexpected energy bills.
Tim Jarvis, chief executive of Ofgem, said: "Too many households are still weighed down by debt built up during the energy crisis. Our targeted Debt Relief Scheme will help people get back on top of their finances and make a fresh start, and we welcome the Government’s support to make this happen."
He added: "But this is about much more than tackling historical debt. These steps balance customer rights with their responsibility to pay, empowering them to manage and keep track of their energy bills to prevent debt piling up in the first place."
Ofgem said the wider measures could prevent more than £5 billion of new energy debt building up by 2036.
