The temporary debt allowance known as the Float ended on 1 July 2025, when the updated operating cost and debt allowances took effect1. Ofgem introduced the Float in February 2024 to reflect what it described as the unprecedented increase in debt-related costs, applying it to the energy price cap through the adjustment allowance between 1 April 2024 and 30 June 20251.
The allowance was set at £28 per dual fuel customer, covering additional debt costs incurred by suppliers between 1 April 2022 and 31 March 20241. It was initially expected to run for 12 months but was extended by a further three months to align with the introduction of a new higher enduring debt-related costs allowance, the DRC1. Ofgem has said it would review the Float once data on actual debt costs covering the full period was available, an exercise it calls a true-up1.
"In February 2025 we extended it until the updated operating cost and debt allowances took effect on 1 July 2025. At that point, the Float ended."
A consultation published on 25 March 2026 sets out Ofgem's minded-to position not to introduce any further adjustment to future cap periods for differences between debt-related costs and revenues between 1 April 2022 and 30 June 20251. Having compared suppliers' reported debt-related costs against revenues recovered from allowances over that period, Ofgem states it finds the Float was set at broadly the correct level1. Its assessment shows debt-related allowances, including the Float, were not materially or systematically different from efficient debt-related costs1.
Ofgem's latest data shows total energy debt and arrears rose from around £1.8 billion to around £4.5 billion between October 2021 and September 2025, a two and a half times increase1. The consultation proposes two methodological changes for the true-up: 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 also proposes smaller technical changes reflecting a new Earnings Before Interest and Tax allowance methodology introduced in October 2023, and the use of actual consumption data to estimate supplier revenues1.
| Consultation stage | Date |
|---|---|
| Consultation open | 26 March 2026 |
| Consultation closes | 16 June 2026 |
| Outcome (decision) | August 2026 |
Why it matters for households
The Float was a temporary addition to the price cap, the mechanism that limits what households on standard variable and default tariffs pay1. Its end on 1 July 2025 coincided with the introduction of the enduring DRC allowance, so the way debt-related costs are recovered through capped bills changed at that point rather than disappearing1. Debt-related costs cover customer non-payment, administering debt processes and raising capital to finance timing differences between payment and delivery of energy1.
The consultation concerns whether suppliers recovered broadly the right amount during the Float period, not whether individual households are owed anything. Ofgem states it is not proposing to re-open the allocation of debt costs to payment types or to redistribute funds across customers or suppliers, arguing that retrospectively changing cost allocation decisions would increase regulatory and financial uncertainty1. For a household, the practical effect is that the allowance structure underpinning capped bills is being reviewed in aggregate, and the outcome could bear on how policy costs and levies are treated in future cap periods.
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 to accommodate stakeholders participating in a disclosure exercise, and gives a closing date of 10 June 2026 in that context; the two dates in the document do not agree1. Ofgem states it remains committed to monitoring supplier debt-related costs through quarterly data collection and could instigate a review of the enduring debt allowance should evidence emerge of a material and systematic divergence between costs and allowances in either direction1.