Ofgem announced on 26 September 2024 that consumer energy debt has reached £3.69 billion, an increase of £400 million on the previous quarter1. The figure was published in Ofgem's debt and arrears indicators2. National Energy Action (NEA), the fuel poverty charity, described the level as "hugely alarming" and said it was a consequence of unaffordable bills1.
Peter Smith, NEA's Director of Policy and Advocacy, said the increase had come in a single quarter and warned that higher bills and less support this winter would make it worse without intervention by the government and the regulator1. In a separate piece published the same day, he wrote that the amount customers owe suppliers had "surged to £3.7 bn, up £400 million in just one quarter"4. NEA's later releases also put the figure at £3.7 billion2.
"It's hugely alarming to see levels of energy debt continue to spiral upward, up £400 million in just one quarter. This is a stark consequence of unaffordable energy bills. Without a significant intervention by the government and energy regulator, it will only get worse, with higher bills and less support available this winter."
NEA said the debt sits alongside the price cap rise that took effect on 1 October 2024, which it put at 10%2. It said a typical household would face an annual bill of £1,717, up from £1,5682. Households in Wales face higher than average bills, with typical households in South Wales paying £1,753 and in North Wales £1,7642. NEA also said the increase leaves 6 million UK households in fuel poverty, using its definition that a household is in fuel poverty if it needs to spend 10% or more of its income on energy to maintain a satisfactory heating regime2.
NEA said the current approach to servicing debt costs customers approximately £1.5 billion a year but does not directly help them, leaving them with the same level of debt while suppliers have discretion over how the debt allowance is spent4. It added that prices are forecast to remain at current levels until the end of the decade4. Ofgem calculates its price cap figure based on a typical house, but it is a cap per kWh, not on the total bill; customers who use more pay more2.
Why it matters for households
Energy debt is money owed to a supplier on top of current usage, so households carrying arrears go into winter paying for both. NEA said customers will be paying back large debts alongside their winter usage2. The energy debt and arrears statistics set out how the totals are compiled, and the price cap rates by payment method show how unit rates differ between direct debit, prepayment and standard credit. For a household, the practical link between debt and energy independence is that arrears reduce the money available for other essentials and can constrain how much energy a home uses, which NEA's survey work links to rationing behaviour2.
What happens next
The price cap rise took effect on 1 October 20242. NEA said Winter Fuel Payment eligibility criteria are set to change, leaving many low-income and vulnerable pensioners in Wales without the £200 to £300 annual payment2. It said two million vulnerable pensioners across the UK could miss out on support, according to Age UK, and that 880,000 eligible pensioners currently do not claim pension credit and therefore miss out on Winter Fuel Payment2. NEA called for the UK government to increase support through the Warm Homes Discount scheme and to work with Ofgem and suppliers on direct support to reduce bills, help people at risk of self-disconnection and tackle record debt levels3. No further Ofgem announcement on debt levels has been reported in these sources.
Sources4 cited
- Record energy debt is 'hugely alarming' says fuel poverty charity National Energy Action - National Energy Action (NEA), nea.org.uk
- Half of Welsh adults are likely to ration their energy use this winter – as bills RISE again - National Energy Action (NEA), nea.org.uk
- Almost half of adults are likely to ration their energy this winter – as bills RISE again - National Energy Action (NEA), nea.org.uk
- Any end in sight for soaring energy debts - National Energy Action (NEA), nea.org.uk