Citizens Advice has responded to Ofgem's consultation on historical debt-related costs within the energy price cap, publishing its submission on 9 July 2026. The charity, which is one of the statutory energy consumer bodies for Great Britain, argues that the allowance, described in its response as a float, was set at a level that produced more money than the debt costs it was meant to cover1.
The response states that the evidence shows the float was set too high and led to material over-recovery, and that a further downward adjustment is required to return money to customers1. Debt-related costs are the amounts suppliers are allowed to recover through the price cap to cover customers who fall behind on their bills. The consultation concerns historical costs, meaning costs already incurred rather than those forecast for the coming cap period1.
Citizens Advice sets out two methodological points in its response. It says total debt-related costs and revenues should be calculated across all tariff types, rather than on a narrower basis1. It also says benchmark cost methodologies establish a plausible range to reflect inefficiencies within debt-related costs, and that the weighted average approach should not be solely relied upon1.
"We believe that the evidence shows the float was set at a level which was too high and led to material over-recovery. As such, a further downward adjustment is required to return money to customers."
The submission does not state a figure for the over-recovery, nor does it set out the size of the adjustment it believes is required. Ofgem has not published a decision on the review. Neither the amount of any adjustment nor a timetable for one has been reported1.
Why it matters for households
Debt-related costs sit inside the energy price cap and are paid for through standing charges and unit rates on default tariffs. If an allowance is set above what the debt actually costs to service, the difference is recovered from billpayers; if it is set below, suppliers absorb more of the cost. Citizens Advice's argument is that the allowance has been too high, so money collected from households has exceeded what was needed1.
For a household, the practical effect of any downward adjustment would be a smaller debt-related component inside the cap, which feeds into the level of the cap itself. The scale of that effect is not set out in the response, and the review covers historical costs rather than the forward-looking allowance, so any change would not necessarily appear in the next cap announcement1.
The wider point concerns how the cap is calculated. The consultation process is where methodologies for allowances are tested, and Citizens Advice's challenge to the weighted average approach goes to how the range of plausible debt costs is turned into a single number1. For a home's energy independence, the debt allowance is one of the components that sits outside a household's control: it is set by the regulator rather than by how much energy is used or when it is used.
What happens next
Ofgem has not published its decision on the review, and no date for one appears in the response. The consultation itself closed before the response was published; the response is dated 9 July 20261.