"Thousands on benefits could have energy debt cancelled"

Nearly 200,000 people on benefits could have their debts to their energy supplier cancelled, if they make some effort to pay what is owed.

Unpaid bills and fees have soared in recent years with energy prices so high, leaving a record £4.4bn owed to suppliers.

Up to £500m could be knocked off the total under plans that regulator Ofgem wants to take effect early next year.

But that will also require the cost to be covered through an extra £5 added to everyone's gas and electricity bill. Households on a price cap tariff already typically pay £52 a year to deal with historic debt as part of the £1,755 annual bill.

Under the plans:

• Anyone on means-tested benefits, who built up energy debt of more than £100 between April 2022 and March 2024, will be eligible for help to write it off. Suppliers would identify these customers
  
  
• They would need to make some contribution to paying off the debt or covering the cost of their ongoing energy use
  
  
• If they are unable to pay, they would need to accept help from a debt charity to help manage their finances

Energy debt and arrears in England, Wales and Scotland rose by £750m in a year to £4.4bn, the latest Ofgem data shows.

The figures, which cover the period from April to June, show that a record high of more than one million households have no arrangement to repay their debt.

The regulator has been working on various projects to bring down the debt, starting early next year following consultation.

However, by recovering or cancelling up to £500m, the first phase may only reduce the rate of increase in customer debt, rather than reverse it.

On Wednesday, a committee of MPs said this debt should be cleared using energy network companies "excess" profits.

In a report, the Energy Security and Net Zero (ESNZ) Committee called it "completely inexcusable" that households were forced to choose between eating and heating while companies behind Britain's gas pipes and power lines amassed huge profits. It said these profits should fund a debt relief scheme.

Those windfall profits were partly the result of high inflation, but Ofgem said that renegotiating price controls would bring extra costs to consumers that would outweigh the benefits.

Charlotte Friel, from Ofgem, said the growing amount of energy debt was a "significant challenge" for those in debt as well as for households that face higher bills to cover debt that can't be recovered. She said it also meant the industry was less able to invest because of the costs of debt.

Ned Hammond, from Energy UK, which represents suppliers, said the scheme was an "important first step" but would need to be expanded to meaningfully address the debt problem and reach a wider group of customers.

Charities said the move was long overdue, as families were still facing high energy bills, although some campaigners believe the industry should pay.

So those of us who scrimped and saved to pay their bills will be penalised while the scroungers and parasites are rewarded?

Also I resent the use by the BBC of a picture of an elderly pensioner as representing a parasite on benefits.

Totally agree with you, Dutchman.

Middle class households to pay off £500m worth of energy debts



Millions of families will see their energy bills rise to help pay off the £4.4bn mountain of debt built up by Britain’s poorest homes.

Ofgem on Thursday said it would wipe £500m of debt accumulated by 195,000 families during the energy crisis as part of a new plan to tackle the growing number of unpaid bills.

The cost will be socialised across all households, with the average bill payer expected to see £5 added to their bills by 2027-28 as a result of the policy.

Debt charities welcomed the announcement as “overdue” but the move risks proving controversial given millions of people will pay off the debts of others.

While the regulator’s initial announcement relates to £500m of the £4.4bn debt pile, this was described as “phase one” – suggesting more costs may be moved onto the bills of customers who are able to pay.

Ofgem argued that bill payers would bear the cost of debt collection and write-offs regardless, as suppliers would pass it onto them via bills.

It also claimed the write-offs would save customers money relative to if it did not intervene, by lowering the amount on their bills going towards debt-related costs.

The regulator is also preparing to force households moving into a new property to use prepayment meters until they set up their own energy accounts. Smart meters would be automatically moved into prepayment, meaning people will have to load money when they move in.

Currently, when someone moves into a new home, the energy accounts for the property are switched to an anonymous “occupier” status. As a result, debts accumulate until the new household registers with a provider.

Ofgem said these unpaid sums account for up to a third of its multi-billion pound debt pile.

Charlotte Friel, from Ofgem, said: “We must protect consumers by striking the right balance between making sure those that can pay are supported to do so, and targeting support at those who need it most.

“These proposals will both directly reach households and relieve the burden of unmanageable debt, while also making changes to the way that debt is managed in the sector. “

https://www.telegraph.co.uk/business/2025/10/30/unpaid-energy-debts-to-paid-off-by-middle-class-households/