Energy Debt and Repayment Plans

An energy debt repayment plan is an arrangement with a supplier to clear arrears in instalments on top of, or instead of, the ongoing charge for energy used. Ofgem's guidance to households is that a supplier can agree a payment plan, a payment break or a reduction, review current payments and debt repayments, and give access to hardship funds¹. The obligation is not simply to offer something: suppliers cannot disconnect any customer without first taking all reasonable steps to help them repay their debts, and are not allowed to cut off supply for certain vulnerable consumers³.

The scale behind the obligation is large. Ofgem figures put domestic consumer energy debt at £4.43 billion by June 2025⁴, and a Lords Library briefing records energy debt doubling since 2020 to £4.5 billion⁵. A Scottish Government report cites £3.7 billion of domestic energy debt at GB level⁶. Energy debt is now the single most common type of debt that Citizens Advice deals with⁷.

For a household, a repayment plan is the main route back to a normal account. It keeps the supply on, it can be reviewed when circumstances change, and it does not by itself prevent a switch once the arrears position is resolved. What it does not do is remove the debt: the arrears remain owed to the supplier, and the plan is only as durable as the household's ability to keep to it.

What a repayment plan is, and when a supplier must offer one

A repayment plan is an agreement to pay off arrears over time, usually alongside a revised ongoing payment. Ofgem's consumer guidance lists what a household can ask a supplier to do: agree a payment plan, payment break or reduction, review current payments and debt repayments, and give access to hardship funds¹. The same set of options appears in Ofgem's advice on getting help with bills¹¹.

The trigger is not a formal application or a means test by the household. The guidance is framed around a household that is struggling to pay for energy or thinks it may get into difficulty². That wording matters: a supplier's duty to engage begins before arrears crystallise, not only after a missed payment.

Where a prepayment meter is involved, the same principle applies to emergency credit. Any credit taken must be paid back when the customer next tops up, and the supplier must work with the customer to agree a payment plan for it¹². Emergency credit is therefore not free borrowing; it is a short-term advance that converts into arrears if it is not repaid.

The practical content of a plan varies. It may be a payment break, where collections stop for a period; a reduction, where the ongoing charge is lowered to reflect reduced usage or a lower tariff; or a structured repayment of the arrears on top of the ongoing charge. Ofgem's debt strategy work describes suppliers committing to voluntary debt support tailored to the needs of their customers, over and above statutory schemes⁹.

Domestic energy debt has reached £4.79bn: the scale of the problem

The headline figures differ by source and by date, and the differences are worth stating plainly. Ofgem's own debt strategy update records domestic consumer energy debt reaching £4.43 billion by June 2025⁴. A Lords Library briefing on electricity prices in Great Britain records energy debt doubling since 2020 to £4.5 billion⁵. A Scottish Government report on tackling fuel poverty cites £3.7 billion worth of domestic energy debt at GB level⁶.

What the sources agree on is direction. Debt has grown, and it has grown faster than the schemes designed to relieve it. Ofgem's consultation on a debt relief scheme notes that suppliers committed to providing over £500 million of voluntary debt support tailored to the needs of their customers for winter 2024/2025, in addition to statutory programmes such as the Warm Home Discount⁹. The Warm Home Discount itself is an obligation on all domestic energy suppliers with over 1,000 customers to provide an annual bill discount, or rebate, to eligible households¹⁴.

The distribution of the problem matters for how plans are set. Energy debt is the single most common type of debt that Citizens Advice deals with⁷, and the charity advised 11,070 people on energy debt in January 2024 alone⁸. That is one month of one advice service, which indicates how routine arrears have become rather than the total number of households affected.

For a household, the significance is that arrears are now a mainstream situation rather than an exceptional one. Suppliers have processes, codes and hardship funds built for it, and the evidence base for those processes is public. The dependence that remains is on the supplier's willingness to agree terms and on the household's income holding up while the plan runs.

How to agree a repayment plan you can actually afford

The starting point is the supplier's own menu. Ofgem's guidance is that a household can ask a supplier to agree a payment plan, payment break or reduction, review payments and debt repayments, and give access to hardship funds¹. Asking for a review of the ongoing payment is as legitimate as asking for time to pay the arrears, and the two are usually settled together.

An ability-to-pay assessment is the mechanism behind an affordable figure. The Energy Ombudsman's casework shows what happens when it is not done properly: one case concerned a consumer struggling to meet ongoing energy payments under an agreed 12-month debt payment plan whose changing financial circumstances were not reviewed by the supplier¹⁵. The lesson from that case is that a plan is a living arrangement, and a change in income, household size or health is grounds for asking for it to be revisited.

Practical points that recur across the sources:

• Emergency credit converts to debt. Credit taken on a prepayment meter must be repaid when the customer next tops up, under an affordable payment plan agreed with the supplier¹².
• Switching is blocked while arrears are live. A household cannot switch supplier if it has been in debt to its supplier for more than 28 days¹⁰.
• Reconnection follows agreement. Where a supplier agrees a repayment plan because the charges cannot be paid at once, it should reconnect the supply within 24 hours¹⁶.
• The plan should be recorded. The Ombudsman can order a supplier to provide an affordable payment plan as an outcome of a complaint, alongside compensation, an apology, a refund or an agreement to fix the problem¹⁷.

The condition in that code is the whole of it: the protection runs while the plan is kept to. A plan that is missed typically returns the account to collections, which is why the affordability of the figure matters more than the speed of clearing the balance.

What happens if a plan cannot be agreed

Where a supplier and a household cannot agree terms, the routes out are escalation and, in some cases, a different payment method. The Energy Ombudsman can review a dispute once a complaint has been raised with the supplier first and either eight weeks have passed or a deadlock letter has been issued¹⁹. The Ombudsman informs the consumer of its decision within six weeks of escalation, after asking for information and evidence and reviewing what both sides provide, and then gives the energy company a set of actions to resolve the problem²⁰.

The outcomes available include financial compensation, an apology, an agreement to fix the problem, a refund, or an affordable payment plan¹⁷. That last outcome is the one that matters most for arrears cases: the Ombudsman can effectively set the terms the supplier would not.

For prepayment customers, the alternative to an agreed plan is often a deduction from the meter. Ofgem's prepayment guidance is that emergency credit must be repaid when the customer next tops up, with an affordable payment plan agreed with the supplier¹². Where a plan cannot be agreed at all, the supplier's remaining option is a court warrant to enter and disconnect, and it must send notice that it is applying¹⁶. That step is rare: the usual alternative offered is a prepayment meter¹⁶.

Disconnection protections: when a supplier cannot cut you off

The protections operate in layers, and they are not identical across the four nations.

The first layer is the general rule. Suppliers cannot disconnect any customer without first taking all reasonable steps to help them repay their debts, and are not allowed to cut off supply for certain vulnerable consumers³. Ofgem's consumer guidance states that a household in debt but actively engaging with its supplier to manage the bill will not be disconnected²¹.

The second layer is seasonal. Between 1 October and 31 March each year, a supplier must offer support, such as help setting up a payment plan, where someone in the home has reached State Pension age, is disabled, or has a long-term physical or mental health condition¹⁶. A supplier also cannot disconnect a household at State Pension age between 1 October and 31 March where the occupants are the pensioner alone, other pension-age adults, or children under 18¹⁶.

The third layer is the Energy UK Vulnerability Commitment, a voluntary agreement. Suppliers signed up to it will not disconnect at any time of year if the household includes someone who is disabled, has long-term health problems, has severe financial problems, or has children under 6 living at home¹⁶. Signatories also will not disconnect between 1 October and 31 March if a child under 16 lives in the home¹⁶. Most suppliers have signed up¹⁶.

Northern Ireland has its own framework. The Utility Regulator's Code of Practice for Consumers in Vulnerable Circumstances provides that a customer in debt who is actively engaging with the supplier to manage the bill will not be disconnected²¹. nidirect's guidance on overdue utility bills sets out the same code of practice, under which suppliers will not cut off supply where a payment plan is agreed and kept to¹⁸.

Energy UK's Vulnerability Commitment: what signatory suppliers promise

The Vulnerability Commitment is the industry's voluntary layer of protection, and its limits are as important as its content. Most suppliers have signed up to it¹⁶. It is not a licence condition, so a supplier that has not signed is not bound by it, and the protections it adds sit on top of, rather than replacing, the statutory and licence rules.

What signatories promise falls into two groups. The first is a year-round ban on disconnection for households including someone who is disabled, has long-term health problems, has severe financial problems, or has children under 6 living at home¹⁶. The second is a seasonal ban between 1 October and 31 March where a child under 16 lives in the home¹⁶.

Alongside the commitment, suppliers have committed to over £500 million of voluntary debt support tailored to the needs of their customers for winter 2024/2025, in addition to statutory programmes such as the Warm Home Discount⁹. That support is discretionary: it is not an entitlement, and its form varies between suppliers.

For a household, the commitment is a useful check on what to expect but not a guarantee of a particular outcome. The practical test is whether the supplier has signed it, which the supplier can confirm, and whether the household falls into one of the defined groups. Where it does, disconnection should not follow even if a plan has not yet been agreed.

Free help: Citizens Advice, National Debtline and StepChange

Free, independent advice is available and does not depend on the supplier's goodwill. Citizens Advice offers information and support on struggling to pay bills, problems with a supplier or supply, saving energy at home and getting a better energy deal¹. The consumer service covers England and Wales, on 0808 223 1133, with a Welsh language line on 0808 223 1144, open Monday to Friday, 9am to 5pm²². In England there is also a general advice line on 0808 144 8844².

StepChange Debt Charity can be reached on 0800 138 1111¹⁹. National Debtline is a separate free service for debt problems, and local authority welfare teams also run advice: Tameside Council, for example, advertises a free telephone advice service to help with benefits, money and bill problems²³.

In Northern Ireland, suppliers refer customers who are struggling to pay bills to organisations such as Advice NI, which offer free, independent debt advice²⁴. nidirect's guidance on advice if you are struggling to pay energy bills sets out the same route²⁴.

The value of an advice agency in an arrears case is that it can test the affordability of a proposed figure against the household's whole financial position, not just the energy account. It can also act as an intermediary where dealing with the supplier directly has become difficult.

The Extra Help Unit and the Energy Ombudsman: when to escalate

Escalation runs in a fixed order, and the first step is always the supplier. The Energy Ombudsman requires a complaint to be raised with the supplier first; if the issue is not resolved after eight weeks, or a deadlock letter is received, the case can be escalated free of charge¹⁹. The same eight-week period applies to heat networks²⁵. A consumer can also escalate where the problem is not fixed within eight weeks, the two sides cannot agree how to fix it, or the decision received is unsatisfactory¹⁹.

Once a case is escalated, the Ombudsman asks for information and evidence, reviews what both the consumer and the energy company provide, informs the consumer of its decision within six weeks, and gives the energy company a set of actions to resolve the problem²⁰. The Ombudsman can also review disputes with Green Deal providers if they are unable or unwilling to help when something goes wrong with a Green Deal plan¹⁹.

The Extra Help Unit is a separate route for consumers in vulnerable circumstances, by referral²⁵. The Citizens Advice consumer service may refer a case to it where someone needs support with a difficult or urgent complaint, cannot deal with the supplier alone because of personal circumstances, is considered vulnerable, or is at risk of disconnection¹⁹. The unit supports vulnerable consumers by raising complaints with energy suppliers on their behalf, particularly where there is a risk of disconnection or complex personal circumstances¹⁹.

For a household, the sequence is: ask the supplier for a plan and a review, keep a record of what was agreed, escalate to the Ombudsman if the supplier will not engage or the plan is unaffordable, and ask the consumer service about the Extra Help Unit where vulnerability or disconnection risk is involved. The dependence that remains throughout is on the supplier's cooperation and on the household's income holding while the plan runs.