Ofgem's new and strengthened consumer standards came into effect on 14 December 2023, the regulator confirmed in a press release published the following day1. The standards require energy suppliers to offer debt repayment plans at the earliest opportunity and to consider temporary debt repayment holidays where appropriate1.
The regulator said the standards will also improve ease of contact between customer and supplier, ensure customer contact centres are open at times that meet customer needs, and make it easier for consumers to see how good suppliers' customer service is by publishing information on their Citizens Advice star rating1.
"These consumer standards, which came into effect officially yesterday (Thursday 14 December)"
Alongside the standards, Ofgem opened a consultation on a one-off price cap adjustment of £16, equivalent to around £1.33 a month, to be paid between April 2024 and March 20251. The regulator said the adjustment would ensure suppliers have the resources to support customers struggling with debt by setting up payment plans, writing off unmanageable debt on a case-by-case basis, and working out affordable repayment holidays1. Under the proposals, any extra costs would not be passed onto customers who use prepayment meters1.
Ofgem said new figures published that day showed energy debt had reached almost £3 billion, its highest ever level, due to sustained high wholesale energy prices and wider cost of living pressures1. In its notes to editors, the regulator stated that technically the £3bn refers to "debt and arrears over 90 days due"1. It also said the price cap had fallen from £2,500 under the Government's Energy Price Guarantee in January 2023 to £1,928 in January 20241.
| Measure | Detail |
|---|---|
| Consumer standards effective date | 14 December 20231 |
| Proposed one-off price cap adjustment | £16, around £1.33 a month1 |
| Period of payment | April 2024 to March 20251 |
| Energy debt level | Almost £3 billion, highest ever1 |
| Price cap, January 2024 | £1,9281 |
Ofgem also published its decision not to adjust the price cap level based on variances in wholesale energy costs over Winter 22/23, considering that observed variances were more based on the risk management practices of individual suppliers than a systematic feature of the market as a whole1.
Why it matters for households
The standards give households in payment difficulty a clearer route to a repayment plan, and in some cases a temporary break from payments, rather than an immediate demand for the full amount owed1. The requirement to publish Citizens Advice star ratings means a supplier's record on customer service becomes visible before and during a dispute, which matters where a household is trying to resolve a billing problem. The proposed £16 adjustment would add around £1.33 a month to bills for credit customers between April 2024 and March 2025, while prepayment meter customers would not carry the extra cost1. For a home's energy independence, the practical effect is that support with arrears is set out in enforceable standards rather than left to individual supplier discretion, though the cost of that support is recovered through the price cap from most billpayers.
What happens next
The £16 price cap adjustment is a consultation proposal, not a final decision1. Ofgem said it will seek views from stakeholders in 2024 on approaches for dealing with bad debt beyond the price cap1. It has also asked for stakeholder views on future changes to the wholesale methodology and technical changes to the Annex 2 wholesale allowance model as part of its wholesale consultation1.