Energy debt reaches record ยฃ4.79 billion ahead of 13% price cap jump
Debt to energy suppliers has reached a new record high of ยฃ4.79 billion โ a 5% increase on the last quarter, Ofgem has said.
The number of accounts repaying debt has increased by 3% for electricity โ to 852,000 โ and by 4% for gas โ to 710,000, the regulator said.
Average debt among those who have an arrangement to repay it has increased by 4% for electricity โ to ยฃ828 โ and by 4% for gas โ to ยฃ679.
Average arrears for those without a repayment plan hit almost twice this at ยฃ1,876 for electricity and ยฃ1,623 for gas.
The latest figures come ahead of Ofgemโs price cap rising by 13% from July 1.
It is understood forecasts show the next price cap taking effect from October 1 remaining at similar levels to July.
Ofgemโs director general of markets Neil Kenward said: โEnergy debt is continuing to rise, putting pressure on households facing the stress of debt, increasing costs for bill payers, and limiting the industryโs ability to invest and innovate.
โThis 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.
Regulator Ofgem said that total debt and arrears in England, Wales and Scotland had risen by 15% in a year.
The data is updated every three months, with the newly-published figures covering the period from January to the end of March and relating to energy customers who have been in debt for more than three months.
Gillian Cooper, director of energy at Citizens Advice, said: โIt is extremely worrying that energy debt has again grown to record levels, but itโs not a surprise.
โAt Citizens Advice, weโve seen a staggering 70% increase in the number of households we support with energy debt since 2021.
โSoaring debt is hurting vulnerable households and ultimately driving up the costs of everyoneโs bills.โ
National Energy Action policy analyst James Mabey said: โIt is deeply worrying that Ofgemโs latest figures show energy debt has risen again to a new record high.
โFor the households National Energy Action supports, the consequences of energy debt include cold homes, rising anxiety and impossible choices about essentials.
โThis 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.
โAllowing 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.โ
Ned Hammond, deputy director of customer policy at Energy UK, said: โThe latest figures show that the debt crisis engulfing the energy sector continues to worsen.
โMany households simply canโt afford their energy costs, and rising bills driven by the conflict in Iran will be a worry for lots of customers.
โAnyone who needs additional support should contact their supplier in the first instance, as they offer a range of additional measures from flexible payment plans to energy-saving technology.
โBut it must also be acknowledged that current rules make it all too easy for customers to fall into arrears, with limited routes to get out.
โThatโs why Energy UK has been calling for a comprehensive debt strategy to properly tackle this challenge.
โWe welcome Ofgemโs plans to change the home move process to reduce the risk of new occupants building up unpaid bills.
โThis should now be combined with the swift launch of the Debt Relief Scheme, actions to widen adoption of Smart Pay As You Go meters, better targeted bill support from the Government, and stronger collaboration between suppliers and debt advice agencies.โ
