The debt relief scheme, part of the chancellor’s “circuit-breaker” strategy put forward in last month’s budget, is designed to help about 2.4 million of the hardest-hit households. Energy debt could reach £7bn by the end of the year. At a roundtable meeting on Thursday, Billington is understood to have told bosses from Octopus Energy, British Gas, EDF Energy and other suppliers that they still had a “crucial role” to play. Suppliers are expected to proactively identify customers who may be under financial strain and offer debt payment plans or direct them to advice services. The government also plans to reform the home-moving process. About 40% of unpaid bills are understood to build up during moves, and the reforms include requiring landlords to provide meter readings and moving dates to suppliers when a tenant moves in or out. In a statement after the meeting, Billington said: “I know that energy debt weighs heavily on millions of families across the country. That affects all of us, with the costs passed on to other billpayers.” The average household currently pays about £50 a year on its energy bill to service unpaid energy bills across the market. The government believes the one-off debt relief scheme and new measures could save all households about £130 on average over the next 10 years. Gillian Cooper, director of energy at Citizens Advice, said it was “essential” that the new initiative not only tackles existing debt but also includes protections to help prevent households from falling into it, with typical annual bills predicted to rise again in January. Rachel Fletcher, a director at Octopus Energy, said she was “pleased to see a focus on improving what suppliers do to prevent customers from falling into debt in the first place”, and said: “Nothing in this package should weaken suppliers’ incentive to keep innovating and investing to help customers avoid and manage debt.”
Energy minister calls on suppliers to do more on unpaid bills ahead of almost £2.5bn debt relief scheme
Government seeks to tackle record energy debt that could reach £7bn as typical bills are forecast to rise again
Energy minister Polly Billington has told the bosses of Great Britain’s biggest energy suppliers to do more to help households get on top of unpaid energy bills this winter, before the government spends almost £2.5bn to help write off the country’s record high energy debts.
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Analysis
Why This Matters
- The cost of unpaid energy bills is already passed on to all households through higher bills; the scheme could save the average household about £130 over ten years if it works as intended.
- Millions of vulnerable households may finally get their debts written off, but the government is also pressuring suppliers to do more to prevent debt from building up again.
- With typical annual bills expected to rise again in January, the success of both the one-off relief and the new prevention measures will be closely watched.
Background
Energy debt in Great Britain has reached record levels following the energy crisis that began in 2021. The government’s budget last month included a “circuit-breaker” strategy to write off the debts of the hardest-hit households while introducing measures to stop debt accumulating again. The scheme comes as suppliers are facing pressure to help customers before the relief is rolled out.
Key Perspectives
- Polly Billington (minister for energy consumers): Says energy debt weighs heavily on millions of families and the government is acting to make energy affordable; suppliers have a crucial role in tackling the longstanding issue.
- Gillian Cooper (Citizens Advice): Says the initiative must both clear existing debt and incorporate protections to stop households falling into debt, especially with bills predicted to rise in January.
- Rachel Fletcher (Octopus Energy): Welcomes the focus on prevention but warns that the package must not weaken suppliers’ incentive to keep innovating and investing in debt management.
What to Watch
- How quickly the £2.5bn debt relief scheme reaches the 2.4 million households it is meant to help, and whether suppliers meet the expectation to proactively identify struggling customers.
- The January 2027 forecast rise in typical annual energy bills, which could drive more households into debt.
- Whether the proposed reforms to the home-moving process succeed in cutting the 40% of unpaid bills that currently build up during house moves.
Sources
- Minister tells energy suppliers to do more to help households tackle unpaid bills this winter · The Guardian
- Minister tells energy suppliers to do more to help households tackle unpaid bills this winter · The Guardian
- Minister tells energy suppliers to do more to help households tackle unpaid bills this winter · The Guardian
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedThe energy minister called on suppliers to do more to help households tackle unpaid bills this winter.World news | The Guardian: “Minister tells energy suppliers to do more to help households tackle unpaid bills this winter.”
- SupportedThe government is to spend almost £2.5bn on the debt relief scheme.World news | The Guardian: “before the government spends almost £2.5bn to help write off the country’s record high debts.”
- SupportedEnergy debt could reach £7bn by the end of the year and is described as record high.World news | The Guardian: “This includes measures to tackle household energy debt, which could reach £7bn by the end of the year.”
- SupportedTypical annual energy bills are predicted to rise again in January.World news | The Guardian: “with typical annual energy bills predicted to increase again in January”
- SupportedThe scheme is part of the chancellor’s circuit-breaker strategy and is intended to help about 2.4 million of the hardest-hit households.World news | The Guardian: “the government’s plan to pay down the energy debts of about 2.4m of the hardest-hit households. The debt relief scheme is part of a wider “circuit-breaker” strategy put forward by the chancellor”
- SupportedAt Thursday’s roundtable, Billington was understood to have told suppliers they still had a “crucial role” to play.World news | The Guardian: “The minister for energy consumers, Polly Billington, is understood to have told bosses from energy companies including Octopus Energy , British Gas and EDF Energy that suppliers would still need to play a “crucial role””
- SupportedSuppliers are expected to identify customers under financial strain and offer payment plans or debt-advice services.World news | The Guardian: “Suppliers are expected to proactively identify customers who may be under financial strain and offer help such as debt payment plans or pointing them in the direction of debt advice services.”
- SupportedAbout 40% of unpaid bills are understood to build up during home moves.World news | The Guardian: “About 40% of unpaid bills are understood to build up during the process of moving home.”
- SupportedThe government plans reforms requiring landlords to provide suppliers with meter readings and moving dates when tenants move in or out.World news | The Guardian: “The government plans to tackle this with reforms including a new obligation on landlords to provide meter readings and moving dates to their supplier when a tenant moves in or out of a property.”
- SupportedBillington said, “I know that energy debt weighs heavily on millions of families across the country. That affects all of us, with the costs passed on to other billpayers.”World news | The Guardian: “In a statement after the meeting, Billington said: “I know that energy debt weighs heavily on millions of families across the country. That affects all of us, with the costs passed on to other billpayers.””
- SupportedCooper said it was essential the initiative tackle existing debt and protect households from falling into debt, noting bills were predicted to rise again in January.World news | The Guardian: “Gillian Cooper, the director of energy at Citizens Advice, who attended the meeting, said that with typical annual energy bills predicted to increase again in January it was “essential” that the government’s new initiative “not only tackles existing energy debt, but also includes protections to help prevent households from falling into it in the first place”.”
- SupportedFletcher said she was pleased suppliers’ work to prevent debt was in focus and that the package should not weaken their incentive to innovate and invest to help customers avoid and manage debt.World news | The Guardian: “Rachel Fletcher, a director at Octopus Energy, the country’s biggest energy supplier, said she was “pleased to see a focus on improving what suppliers do to prevent customers from falling into debt in the first place”. “Nothing in this package should weaken suppliers’ incentive to keep innovating and investing to help customers avoid and manage debt,” Fletcher said.”