As of April 2025, nearly 400,000 UK households are in arrears on their energy bills, a significant rise compared to previous years. The Office for National Statistics (ONS) reported that over 2.7% of direct debit payments for energy bills were missed, marking the highest default rate since records began in 2019. This surge in arrears has contributed to the overall energy debt reaching a record £3.8 billion, more than double the £1.8 billion recorded in 2022. With energy prices remaining high, many households are struggling to keep up with payments despite a recent reduction in the energy price cap.
The average energy debt per household has surged to £2,449, a 20% increase from the previous year. Experts point to several contributing factors, including systemic issues from the COVID-19 pandemic, where many customers faced inadequate payment reviews, leading to prolonged underpayments. When these reviews resumed in 2023, many customers found themselves hit with sudden increases in their monthly energy bills, worsening the default rates. Despite a 6% reduction in the energy price cap from April 2025, the financial strain on households continues to be significant.
In response to the escalating crisis, organizations like Citizens Advice and the End Fuel Poverty Coalition are calling for targeted support measures, including a debt relief scheme for struggling households. Ofgem has already introduced stricter rules for energy suppliers to help identify customers in need and provide necessary assistance. The government has also planned to extend the £150 warm home discount to support 6 million households next winter. However, advocates argue that more comprehensive and sustained interventions are needed to tackle the root causes of the rising energy debt.
