Overview
- Ofgem set out a first-phase scheme to cancel up to £500 million of arrears, with launch expected in early 2026 following a consultation due in the coming weeks.
- The cost would be recovered through an estimated £5 per year added to bills from 2027, with the regulator saying the approach should cut debt-related charges currently embedded in bills.
- Eligibility focuses on people on means-tested benefits who built up more than £100 of debt between April 2022 and March 2024, with suppliers identifying customers and support contingent on contributions or engagement with accredited debt advice.
- Wider reforms aim to stop new debts building, including trials that require move-in registration and switching smart meters in unregistered homes to limited prepayment to tackle ‘occupier’ accounts suppliers estimate at £1.1–£1.7 billion.
- Household energy arrears have hit a record roughly £4.4 billion, while cross-party MPs urge using about £4 billion in network companies’ excess returns for relief; Ofgem cautions that retrospective changes could increase consumer costs elsewhere.