Consumer debt and arrears reached a record high of £3.85 billion

Consumer debt and arrears reached a record high of £3.85 billion in quarter 4 2024, according to Ofgem's state of the energy market report: retail, published on 15 April 2025¹. The same report states that the current price cap for average households on dual fuel Direct Debit increased to £1,849 in April 2025 due to higher wholesale costs¹.

The report covers four areas: fair prices, suppliers and resilience, quality and standards, and low-cost transition¹. On prices, it says business electricity and gas prices have begun to fall but remain higher than pre-2021 levels, that more tariffs are now available in the market, and that consumer switching activity is rising but still below pre-crisis levels¹. The price cap figure of £1,849 applies to average households on dual fuel Direct Debit¹.

On supply, Ofgem reports 23 domestic energy suppliers and 72 business energy suppliers currently active in the market¹. Six large companies dominate the domestic market with 91% market share, and Octopus is now the largest electricity supplier and second largest gas supplier in Great Britain (England, Scotland and Wales)¹. Some newer suppliers are growing quickly, but they still have very small overall market shares¹.

On service quality, domestic complaints are at their lowest since 2022, and 81% of customers are now satisfied with their energy supplier, which Ofgem describes as the highest level ever recorded in the survey¹. Prepayment meter customers' satisfaction has improved, matching the satisfaction levels of Direct Debit customers for the first time¹. Business satisfaction remains steady at 62%, with larger businesses reporting higher satisfaction rates than smaller ones¹.

On the low-cost transition, smart time of use (ToU) tariff adoption has increased by over 75% in the last year, which Ofgem attributes to rising electric vehicle ownership and people looking for more innovative and cost-effective energy options¹. Smart meters have been installed in 65% of homes and 61% of businesses, with 90% of these meters operating in smart mode¹. Ofgem says it is undertaking compliance action with energy suppliers to reduce the number of smart meters not operating in smart mode¹.

"Consumer debt and arrears reached a record high of £3.85 billion in quarter 4 2024."

Why it matters for households

The debt figure and the price cap figure sit in the same report, and both bear on what a household owes and what it pays. Arrears of £3.85 billion across the customer base represent money owed to suppliers, which in turn affects how those suppliers manage accounts and recover balances. The cap level of £1,849 sets the limit on what an average dual fuel Direct Debit household pays for units and standing charges, not the total bill, which still moves with how much energy a home uses.

For a home's energy independence, the report's transition figures are the ones that describe take-up rather than price. Smart meters in 65% of homes, with 90% of those running in smart mode, and time of use tariff adoption up by over 75% in a year, indicate that more households have the metering and the tariff structure needed to shift consumption away from peak periods. Ofgem's compliance action on meters not operating in smart mode concerns the gap between installation and function. The report does not give a breakdown of debt by household type, region or payment method, and it does not state how many households are in arrears.

What happens next

Ofgem says it aims to publish the report every six months¹. It also states that it is undertaking compliance action with energy suppliers to reduce the number of smart meters not operating in smart mode¹. No further dates are given in the report.

Sources1 cited

1. State of the energy market report: retail | Ofgem, ofgem.gov.uk