Household debt to energy suppliers has reached a record £4.4 billion, according to new data from Ofgem. The regulator said arrears have grown by more than £750 million in just a year, with more than one million households now owing money without any repayment plan in place.
The average debt for customers with no arrangement stands at £1,716 per household. Campaigners warn this could push more families into financial crisis as winter bills rise.
Why energy debt is soaring
Although energy prices have dropped from the peaks of 2022, they remain well above pre-crisis levels. For many families, the cost of gas and electricity is still a major burden, especially alongside rising food, rent, and mortgage payments.
Some households are not only covering today’s bills but also carrying debts from previous years. This double pressure is leaving many unable to catch up. The lingering effect of past arrears means that even small changes in unit rates or standing charges can make a big difference to monthly affordability.
Rising interest rates and wider living costs have also reduced the spare income available to pay down debts. Many households now face a constant balancing act between energy, mortgage repayments, council tax, and food costs. For those on lower incomes, this juggling act has become impossible without falling behind.
Ofgem’s plans to tackle the crisis
Ofgem has confirmed it is considering a Debt Relief Support Scheme to help households who cannot realistically repay what they owe. Proposals include:
- Allowing suppliers to “debt match” repayments, where customer contributions are matched by the supplier to cut balances faster.
- Writing off debts that are considered unmanageable.
- Improving access to charities and debt advice services to prevent arrears from escalating further.
Any such scheme would likely need to be funded through everyone’s energy bills, a move that could prove controversial. Consumer groups argue that while support is essential, spreading the cost across all households could add further pressure to those already struggling.
How households can limit debt build-up
While national solutions are still under review, experts stress that households should act now to avoid deeper arrears.
Shay Ramani, CEO of Free Price Compare, explained:
“The most common mistake is ignoring bills. Even if you can’t clear the balance, setting up a plan with your supplier is better than letting debt spiral.”
He added that switching remains one of the most effective ways to reduce ongoing costs.
“If you switch energy supplier , you may find a cheaper tariff that eases the pressure straight away. That won’t erase existing arrears but will make future bills more manageable.”
Why comparisons matter now
Tariffs vary widely across the UK. Some suppliers are reintroducing fixed deals up to 10–13% below the October price cap. Others are offering lower standing charges, which can be useful for low-use households.
By carrying out an energy price comparison , families can see whether a fixed or dual fuel deal is better for their circumstances. Even modest monthly savings can add up when debt is already high. Over the course of a year, a £15–20 monthly saving can be the difference between staying on top of payments or falling further behind.
Prepayment households hit hardest
Households using prepayment meter tariffs are particularly vulnerable. These meters often carry higher charges, and customers must pay upfront for energy.
If balances run out, supply can be cut off until more credit is added. With prices still elevated, many prepayment users are struggling to top up, forcing them into difficult choices between heating and other essentials. For some households, that has meant going without gas or electricity for days at a time.
Campaigners have repeatedly called for reforms to make prepayment tariffs fairer, but progress has been slow. Ofgem has recently consulted on limiting standing charges for prepayment users, but until changes are made, this group is expected to remain at highest risk of disconnection.
Support still available
Households in difficulty should also check for support schemes, including:
- Warm Home Discount: a £150 rebate for eligible pensioners and low-income families.
- Winter Fuel Payments: up to £300 for older households.
- Hardship funds: available through some energy suppliers and independent charities.
Local councils may also offer emergency support grants for those in financial crisis. Energy customers are encouraged to contact both their supplier and local authority to ensure they are not missing out on help.
The bigger picture
The surge in energy debt highlights the continuing impact of the cost of living crisis. Even though wholesale energy prices have fallen, millions remain weighed down by arrears from the past two years.
Until reforms are finalised, households are being urged to act quickly — by arranging repayment plans, exploring new tariffs, and using impartial services to ensure they are not paying more than necessary. The sooner families take action, the less likely they are to see debts spiral further out of control during the winter months.