Plans have been announced to write off up to £500 million in unpaid energy bills for some of the country’s most vulnerable households.
This initiative, part of a new Debt Relief Scheme by energy regular Ofgem, aims to support around 195,000 customers who are receiving means-tested benefits, including Universal Credit.
Ofgem has launched a consultation on the plans, with the scheme expected to launch in early 2026.
It’s proposing that households must have accrued over £100 of energy debt between April 2022 and March 2024, during the height of the energy crisis, to qualify.
Importantly, eligible customers must either be making some contribution toward their bills – or be willing to engage with a debt advice charity if they can’t. Energy suppliers will automatically identify and contact those who meet the criteria, so you don’t need to do anything in the meantime.
While this relief will offer a lifeline to many struggling households, it’s crucial to understand the broader context. The UK’s total energy debt now stands at a staggering £4.4 billion, meaning this scheme addresses just over 10% of the problem.
The eligibility criteria are also very narrow, excluding millions of households who may have built up debt outside the specified time frame, as well as all those who are struggling to make ends meet but don’t receive benefits.
To help fund the write-off, Ofgem has confirmed that a £5 annual charge will be added to everyone’s energy bills. While this may not seem like much, it adds to the growing pressure on households already dealing with rising living costs.
This announcement is part of Ofgem’s wider strategy to “reset and reform” how energy debt is managed in the UK. The regulator hopes that by addressing historic arrears and encouraging better engagement with debt support services, it can prevent future debt from spiralling out of control.
If you’re worried about your energy bills or unsure whether you might qualify for support, don’t wait to seek help.
Housing Plus Group customers can access our free energy advice service, delivered in partnership with the Cadent Foundation, to get tailored guidance and support.