The regulator Ofgem has reported that customer debt to energy suppliers has reached a record high of £4.4 billion. This figure represents an increase of over £750 million compared to the previous year, covering the period from April to June. Notably, more than one million households are without any repayment arrangement, also marking a record.
The rise in energy debt is attributed to the increased cost of domestic gas and electricity, which has put many households in a difficult financial position in recent years. While energy prices have decreased from their peak levels, they remain high, contributing to ongoing challenges for customers who are unable to meet their current bills as well as repay outstanding debts. The average debt for households lacking a repayment plan stands at £1,716.
In response to this growing issue, Ofgem is exploring strategies to address household debt. Recent proposals include a “Debt Relief Support Scheme,” aimed at allowing suppliers to either write off unpayable debt or assist customers in paying off their bills through “debt matching.” This initiative may require funding through increased bills for all customers.
Additionally, Ofgem intends to facilitate consumers’ access to support from charities and debt agencies, striving for a consistent approach to mitigate the development of unsustainable debt levels in the future. As the situation unfolds, it raises questions about how effective these measures will be in providing relief to affected households and in preventing future debt accumulation.
Source: https://www.bbc.com/news/articles/c8jmwdrn890o?at_medium=RSS&at_campaign=rss