Energy debt owed to suppliers across Britain has climbed to an unprecedented £4.79billion, marking a five per cent rise compared with the previous quarter, according to figures released by Ofgem.
The regulator’s data reveals that combined debt and arrears throughout England, Wales and Scotland have surged by 15 per cent over the past 12 months.
These troubling statistics arrive just days before households face another financial blow, with Ofgem’s price cap set to increase by 13 per cent from July 1. The quarterly data covers customers who have been in arrears for longer than three months..
The number of electricity accounts with ongoing debt repayments has grown by 3 per cent to reach 852,000, whilst gas accounts in similar circumstances rose by 4 per cent to 710,000.
Britain’s energy debt is growing
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For customers who have established formal repayment arrangements, average electricity debt now stands at £828, representing a four per cent increase, with gas debt averaging £679 following an identical percentage rise.
Those without any repayment plan in place face considerably steeper arrears, with electricity debts averaging £1,876 and gas arrears reaching £1,623, which is nearly double the amounts owed by customers with structured payment agreements.
The figures, which are refreshed on a quarterly basis, relate to the period spanning January through to the end of March.
Neil Kenward, Ofgem’s director general of markets, 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.”
Energy bills to rise by £209 in July as Ofgem price cap expected to hit £1,850 | GETTY
One in three households fear energy debt as bills rise and average arrears hit £750 | GETTY
He described the situation as “a complex, industry-wide issue” requiring coordinated action from the regulator, government, suppliers and charitable organisations to bring debt levels under control.
Gillian Cooper, director of energy at Citizens Advice, said: “At Citizens Advice, we’ve seen a staggering 70 per cent increase in the number of households we support with energy debt since 2021.”
James Mabey, policy analyst at National Energy Action, warned that affected households face “cold homes, rising anxiety and impossible choices about essentials” as a consequence of mounting arrears.
Ned Hammond, deputy director of customer policy at Energy UK, said: “The latest figures show that the debt crisis engulfing the energy sector continues to worsen.”
Ofgem has revealed the annual energy price cap running from July to September | GETTY
He noted that existing regulations make it too straightforward for customers to accumulate arrears whilst offering few pathways out of debt, prompting the trade body to demand a comprehensive strategy to address the crisis.
Energy UK has welcomed Ofgem’s proposed changes to the home move process, designed to prevent new occupants from building up unpaid bills.
Mr Hammond called for this to be accompanied by the rapid introduction of the Debt Relief Scheme, expanded use of Smart Pay As You Go meters, more precisely targeted Government assistance, and improved cooperation between energy companies and debt advice services.