National Energy Action published its response to the additional debt-related costs allowance policy consultation on 16 January 20241. The charity said it is concerned about record levels of debt and arrears in the energy market, which it said had recently reached £2.6bn1.
NEA said the figure demonstrates that an increasing number of households are struggling to afford their ongoing costs of energy and are falling behind1. It said the majority of the £2.6bn comes from arrears, and that there is a clear need for energy suppliers to ensure affordable repayment arrangements are being created1.
"NEA is concerned about the record levels of debt and arrears in the market, recently reaching £2.6bn. This figure demonstrates that an increasing number of households are struggling to afford their ongoing costs of energy and are falling behind. With the majority of the £2.6bn figure coming from arrears, there is a clear need for energy suppliers to ensure that affordable repayment arrangements are being created."
The consultation concerns an additional debt-related costs allowance, a mechanism within the policy costs and levies that suppliers recover through bills. The response document itself has been published as a PDF alongside the summary page1. The published material does not set out the proposed level of the allowance, the period it would cover, or which suppliers would be affected; those details have not been reported in the response as published1.
The £2.6bn figure is given as a market-wide total for debt and arrears, not as an average per household or a per-customer figure1. NEA attributes the majority of it to arrears rather than to other forms of debt1. No breakdown by nation, supplier or payment method is given in the published response1.
Why it matters for households
Debt and arrears at this level indicate that a large number of homes are not covering their ongoing energy costs, which is the point at which a household's control over its own energy use and bills starts to slip. Arrears usually lead to repayment arrangements added on top of current usage, so the amount a home pays each month can exceed what it costs to run that month. For energy independence in the practical sense, meaning a household paying for what it uses without carrying a balance forward, a market total of £2.6bn in debt and arrears is the clearest available signal that many homes are not there1.
The consultation itself concerns how suppliers recover the cost of customer debt through the policy costs and levies built into bills, which means the outcome can affect all households, including those not in arrears. How such consultations are run, and at what stage households and charities can feed into them, is set out in the site's guide to energy consultations and how policy is made. For households already carrying arrears, support routes including charitable grants are covered in the guide to the British Gas Energy Trust.
What happens next
NEA has published its response and a link to the full PDF1. No date for a government decision on the additional debt-related costs allowance, and no date for any change taking effect, is given in the published response1.