Consumer Scotland published its response to Ofgem's Debt Relief Scheme policy update working paper on 2 September 2025. The statutory body for consumers in Scotland said it broadly supports the proposed eligibility criteria for the scheme, which is designed to write off historic energy debt for households on means-tested benefits1.
The response draws on Consumer Scotland's own energy affordability research, which found that 15% of households reported being in energy debt or arrears, equivalent to 383,000 households in Scotland, up from 9% over the previous 12 months. Almost half of customers in energy debt, 49%, reported they did not have a formal debt repayment plan in place. Groups more likely to be in debt included households receiving means-tested benefits, those with incomes under £20,000, younger age groups aged 25 to 34, households where a member has a disability or health condition, and households with children under 51.
"Consumer Scotland broadly supports the proposed DRS eligibility criteria."
The body welcomed Ofgem's decision to use Department for Work and Pensions data to identify eligible means-tested benefit recipients, saying the earlier proposal to use supplier-held Warm Home Discount data risked eligible Scottish consumers missing out because of the separate application process for working-age Broader Group recipients in Scotland1.
On the scheme's engagement pathways, Consumer Scotland said the third criterion, "smart meter installation", should instead require agreement to an installation rather than a discussion about one, arguing this would better align with the scheme's aim of preventing repeat indebtedness. It cited previous UK Government analysis estimating the total value benefit associated with better debt management at approximately £1.1bn1. It also recommended Ofgem explore the cost and practicality of warm referrals, such as live transfers or call backs, as an improvement to the fourth pathway, signposting to an accredited advice charity1.
On the supplier reimbursement model, Consumer Scotland said the choice would inevitably create some competitive distortion, and that suppliers hold the commercial data needed to assess detailed impacts. It said any model must prioritise efficient cost recovery and fairness for bill payers who will ultimately fund the scheme1.
The response also raised heat network consumers, noting that at present they could only access the proposed scheme for debt accrued on their electricity account, if they are not part of a private wire network, leaving heating account debt unprotected. It said this is particularly concerning because heat network consumers are not protected by the Default Tariff Cap, and that it would welcome further exploration of options as Ofgem assumes its statutory role as heat networks regulator in 20261.
Why it matters for households
The Energy Debt Relief Scheme is intended to clear historic energy crisis debt for households on means-tested benefits, so the eligibility rules and the engagement conditions attached to them determine which homes get relief and what they must do first. Consumer Scotland's support for the criteria, and its call for agreement to a smart meter installation rather than a conversation about one, bear directly on whether households in debt face a practical step before write-off. Its warning on the reimbursement model matters because bill payers fund the scheme through the costs recovered in the price cap, so the design affects every household's standing charges and unit rates, not only those in debt. The heat network point concerns homes on communal or district heating, which sit outside the Default Tariff Cap and, on the current proposal, could not have heating account debt written off.
What happens next
Ofgem is to undertake its exercise of "netting-off", ensuring suppliers are not compensated for the same debt twice, at a future point during a bad-debt true up, a timing Consumer Scotland said makes its concerns about the reimbursement model particularly important1. Ofgem is due to assume its statutory role as heat networks regulator in 20261. No date has been reported for the scheme's launch or for a decision on the final eligibility criteria.