Ofgem introduced the Float in February 2024 to reflect what it called the unprecedented increase in debt-related costs, adding a temporary allowance of £28 per dual fuel customer for additional debt costs suppliers incurred between 1 April 2022 and 31 March 20241. The allowance was applied to the default tariff cap through the adjustment allowance between 1 April 2024 and 30 June 20251.
The regulator has now published a consultation, dated 25 March 2026, setting out its minded-to position not to introduce any further adjustment to future cap periods to reflect differences between debt-related costs and revenues between 1 April 2022 and 30 June 20251. Having compared suppliers' reported debt-related costs against the revenues recovered from allowances over that period, Ofgem says it finds the Float was set at broadly the correct level1.
"In February 2024, we introduced the Float to reflect the unprecedented increase in debt‑related costs."
The allowance was initially expected to be in place for 12 months but was extended for a further 3 months to align with the introduction of a new higher enduring debt-related costs allowance, the DRC1. Ofgem says it extended the Float in February 2025 until the updated operating cost and debt allowances took effect on 1 July 2025, at which point the Float ended1. Before 1 July 2025, debt-related costs in the cap sat across various allowances1.
Ofgem's figures put total energy debt and arrears at around £1.8 billion in October 2021, rising to around £4.5 billion by September 2025, a two and a half times increase since the onset of the gas crisis1. The regulator also introduced an allowance for additional support credit on 1 October 2023 in response to increased levels of ASC being provided to customers1.
The consultation proposes some methodological changes for the true-up exercise, including a weighted average benchmark metric in place of the hybrid benchmark used in the Float methodology, and the inclusion of costs and revenues across all tariff types rather than only customers on variable tariffs1. Ofgem says it is minded to make smaller technical changes to reflect a new Earnings Before Interest and Tax allowance methodology introduced in October 2023, and to use actual consumption data to estimate supplier revenues recovered from debt-related allowances1.
Why it matters for households
The Float is money recovered through the price cap that suppliers use to cover the cost of customers not paying, administering debt processes and financing the gap between payment and delivery of energy1. Because the cap sets the maximum a supplier can charge default tariff customers, the level of any debt allowance feeds into the standing charge and unit rates those households pay.
Ofgem's decision not to propose a further adjustment means no additional retrospective charge is being added to future cap periods for the 1 April 2022 to 30 June 2025 window1. Had the regulator found the Float was set too low, a true-up could have raised costs for households on default tariffs; had it found the Float too high, suppliers would have been recovering more than their efficient costs. Ofgem states its assessment shows debt-related allowances, including the Float, were not materially or systematically different from efficient debt-related costs1.
The wider debt picture is the context for the review. Ofgem's data shows energy debt and arrears roughly two and a half times higher than at the start of the gas crisis1. The regulator says it remains committed to monitoring supplier debt-related costs through quarterly data collection and could instigate a review of the enduring debt allowance if evidence emerges of a material and systematic divergence between costs and allowances in either direction1.
What happens next
The consultation opened on 26 March 2026 and closes on 16 June 2026, with a decision expected in August 20261. Ofgem says the consultation will, by exception, remain open for 12 weeks, closing 10 June 2026, to accommodate stakeholders wishing to take part in a disclosure exercise covering the underlying models and data1. Responses can be sent to priceprotectionpolicy@ofgem.gov.uk1.