StepChange responded to Ofgem's initial consultation on proposals for the Energy Debt Relief Scheme in February 2025, the debt charity has confirmed in a published account of its position1. The charity said it had long endorsed a nationwide scheme to tackle historic energy debt, alongside work to raise standards in the energy debt pathway and longer-term action on affordability1.
Ofgem has split the scheme into two phases. StepChange describes the first as primarily targeted at delivering debt write-off for customers on means-tested benefits, and the second as seeking to reach customers not on means-tested benefits but who are deemed eligible for debt relief subject to an affordability assessment1. The charity said it understood why Ofgem had taken that approach but urged the regulator to ensure design work on the second phase does not lose momentum1.
In its February 2025 response, StepChange said it was particularly supportive of an automatic eligibility route, with allowances for 100% debt write-off for qualifying customers on eligible debt1. It said it continues to see this as a sensible approach, for simplicity of delivery and consumer understanding as well as impact1. Since that consultation, Ofgem has proposed shifting the scope of the scheme to focus more explicitly on facilitating consumer engagement with suppliers and to embed conditionality into the scheme design1.
StepChange argued that making debt write-off for a group of customers receiving means-tested benefits conditional on specific actions is problematic because it risks excluding some in the most precarious situations who most need support1. It cited Ofgem's own acknowledgement on this point:
"consumers in vulnerable situations are significantly less likely to be able to engage with their supplier and protect or represent their own interests"
The charity said that if Ofgem proceeds with conditionality, both phases must be designed to mitigate the risk of people most in need missing out, and that it wants the lowest possible threshold for engagement as a route into eligibility, with Ofgem reconsidering the need for conditionality at all1. It also called for Ofgem to clarify and redouble work to improve debt collection standards alongside rollout of the scheme, noting that typical energy bills continue to sit far above pre-energy crisis averages while targeted financial assistance for those in or at risk of fuel poverty has not sufficiently kept pace1.
Why it matters for households
Energy debt is a household energy independence issue as much as a billing one: a home carrying arrears has less room to absorb price movements, and repayment pressure can shape decisions about heating and appliance use. The design questions StepChange raises go to who is reached automatically and who must act first to qualify. An automatic route, as the charity describes it, would write off qualifying debt without the household having to apply or meet a condition. A conditional route would tie write-off to specified actions, which the charity says risks missing households in the most precarious situations1. The scheme's two-phase structure also means households not on means-tested benefits sit in a later phase whose design work StepChange says must not lose momentum1. How the scheme interacts with existing support, including grants such as those from the British Gas Energy Trust, and with wider questions about energy bills and energy independence, has not been set out in the material published here.
What happens next
The February 2025 consultation has closed and StepChange has responded1. Ofgem's later policy update working paper, which StepChange also responded to, set out the shift towards engagement and conditionality1. No dates for final scheme rules, phase one launch or phase two design have been reported in these sources. The proposals sit within Ofgem's wider process for energy consultations and how policy is made, and the scheme itself is covered in the guide to the Energy Debt Relief Scheme.
Sources1 cited
- Consultation Response: Ofgem Debt Relief Scheme. StepChange, stepchange.org