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UK energy watchdog plans to tackle 4.4 billion pounds consumer debts
Published by Global Banking and Finance Review
Posted on October 30, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 30, 2025
2 min readLast updated: January 21, 2026
Ofgem plans to tackle £4.4 billion in consumer energy debt, proposing a £500 million relief scheme to help reduce bills. Energy prices remain significantly higher than before 2021.
By Susanna Twidale
LONDON (Reuters) -Britain's energy regulator Ofgem announced plans on Thursday to tackle 4.4 billion pounds ($6 billion) of debts built up by customers, which are driving up bills for millions of households.
Unrecovered energy debt is spread across all consumer bills, adding 52 pounds, or around 3%, to the current price cap of 1,755 pounds a year for average use.
Ofgem said it will shortly publish a debt relief scheme which seeks to write off 500 million pounds of debt, helping around 195,000 customers, but did not detail how this would be funded.
“We must protect consumers by striking the right balance between making sure those that can pay are supported to do so, and targeting support at those who need it most,” Charlotte Friel, director for retail pricing and systems at Ofgem, said in a statement.
BILLS STILL 50% HIGHER THAN BEFORE UKRAINE INVASION
The regulator also proposed changing processes when people move into a new home, so that debts are not built up in anonymous accounts before the new occupants register with an energy supplier.
While domestic energy prices have fallen since their peak in 2023, they remain around 50% higher than in the summer of 2021, before Russia’s invasion of Ukraine sent gas prices soaring and sparked an energy crisis in Europe.
The government, which has made cutting energy costs one of its aims, is under pressure to reduce electricity and gas bills after a domestic price cap was increased in October.
Consumer groups have said energy costs remain unmanageable for many and urged the government to offer more support for those struggling.
($1 = 0.7451 pounds)
(Reporting By Susanna Twidale; Editing by David Holmes)
Consumer energy debt refers to the amount of money owed by households to energy suppliers, often due to unpaid bills. This debt can lead to increased energy prices for all consumers.
Ofgem is the Office of Gas and Electricity Markets, the regulator for the electricity and gas markets in Great Britain, responsible for protecting consumers and ensuring fair pricing.
A price cap is a limit set by regulators on the amount that energy suppliers can charge consumers for their energy usage, aimed at protecting consumers from excessive charges.
A debt relief scheme is a program designed to help individuals or households reduce or eliminate their debt, often by writing off a portion of the owed amount.
The invasion of Ukraine has significantly affected global energy prices, causing them to rise sharply, which has led to increased costs for consumers in the UK and Europe.
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