Ofgem announced on 25 February 2025 that it has extended the debt allowance, the funding within the price cap that supports energy suppliers helping customers who are having difficulty paying their bills1. The announcement came alongside the regulator's quarterly price cap decision for 1 April to 30 June 20251.
From 1 April to 30 June 2025 the price for energy for a typical household using electricity and gas and paying by Direct Debit will rise by 6% to £1,849 per year, Ofgem said1. That adds £9.25 a month for a typical household, and is 9% (£159) per year higher than the cap set for the same period in 2024, which was £1,6901. Ofgem attributed the increase mainly to rising global wholesale prices1.
Under the new cap, a household on a standard variable (default) tariff paying by Direct Debit will pay on average 27.03 pence per kilowatt hour (kWh) for electricity, with a daily standing charge of 53.80 pence, and 6.99 pence per kWh for gas, with a daily standing charge of 32.67 pence1. These are averages across England, Scotland and Wales and include VAT1. Ofgem said some people may see a reduction in their standing charges, depending on the region in which they live1.
On the debt allowance, Ofgem said:
"We have also announced an extension of the debt allowance."
The regulator described the allowance as supporting energy suppliers helping customers who are having difficulty paying their bills1. The announcement did not set out the level of the allowance, its duration, or how it is funded within the cap; those details have not been reported in the announcement1. Ofgem also said it has recently opened an industry consultation on introducing a tariff without a standing charge, and that the government has announced an extension to the Warm Home Discount Scheme, which suppliers apply to eligible customers' bills automatically1.
| Item | Figure |
|---|---|
| Typical household cap, 1 April to 30 June 2025 | £1,849 per year |
| Change from previous cap | Up 6%, or £9.25 a month |
| Same period in 2024 | £1,690 per year |
| Electricity unit rate (Direct Debit average) | 27.03p per kWh |
| Electricity standing charge | 53.80p per day |
| Gas unit rate (Direct Debit average) | 6.99p per kWh |
| Gas standing charge | 32.67p per day |
Why it matters for households
The debt allowance sits inside the policy costs and levies recovered through bills, so its extension affects both the support available to households in arrears and the costs spread across all billpayers. For a household already behind on payments, the allowance shapes what a supplier can offer through a repayment plan, and the extension signals that this route remains in place beyond the current period. Because the cap level is set every three months, the allowance is one of the components that can move independently of wholesale prices, which are the main driver Ofgem cited for the April rise1. The cap itself applies to default tariffs paid by standard credit, Direct Debit, prepayment meter or Economy 7 meter, and the actual amount a household pays depends on usage, location and meter type1. Ofgem's own guidance states that suppliers must help customers who tell them they cannot pay1. The wider effect on a home's energy independence depends on how much of the bill is fixed cost rather than units used, which is why the standing charge consultation matters alongside the debt allowance1.
What happens next
Ofgem will publish the price cap levels for 1 July to 30 September 2025 by 27 May 20251. The industry consultation on a tariff without a standing charge is open1. The extension of the Warm Home Discount Scheme has been announced by the government1.