The latest update to energy debt and arrears data from the energy regulator Ofgem has revealed a startling uptick in the level of debt held by UK households.
Between Q1 and Q2 2024, energy debt and arrears rose by 12%, from £3.31 billion to £3.7 billion. The £3.7 billion currently held in debt and arrears by UK energy consumers has increased by almost half since last year, with debt and arrears rising by 43% between Q2 2023 and Q2 2024.
Peter Smith, director of policy and advocacy at energy bill support charity National Energy Action, said: “It’s hugely alarming to see levels of energy debt continue to spiral upward, up £400 million in just one quarter. This is a stark consequence of unaffordable energy bills. Without a significant intervention by the government and energy regulator, it will only get worse – with higher bills and less support available this winter.
“Only by directly reducing the most vulnerable customers’ bills as a priority and helping them to pay off these unmanageable debts can we avoid shattering people’s personal finances and badly damaging their health and wellbeing.”
Energy crisis continues to bite
This news is concerning but unsurprising for the millions of households in the UK still reeling from the effects of the energy crisis that began in 2022 following Putin’s invasion of Ukraine.
In 2023, Ofgem revealed that the number of households facing energy debt and arrears rose 1.9 million to 2.3 million throughout 2023 – an increase of 20%—with over 1.7 million people disconnected from their electricity supply at least once a month in 2023.
Policy interventions have thus far failed to improve fuel poverty rates in the UK. The Committee on Fuel Poverty noted that rates have been “flatlining” over the past five years as the number of households in fuel poverty has remained virtually unchanged from previous years.
In response, a significant amount of effort has been put into helping the most vulnerable households from the crushing weight of energy debt. In August, Minister for Energy Consumers Miatta Fahnbulleh wrote to the UK’s top energy suppliers, urging them to support families in fuel poverty.
In response, the Energy Crisis Commission, an independent group made up of energy experts, has been formed to protect the UK from future energy crises. The ECC commissioners, who include leading figures from Energy UK, the NEA, Citizens Advice, and a top UCL academic, will make high-level policy recommendations to ensure that the UK is better able to withstand any future energy crises.
