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Household energy debt soars to £4.43 billion
Model houses on a pile of coins and bank notes, July 29, 2025

HOUSEHOLD energy debt has soared to £4.43 billion, leaving hundreds of thousands trapped in arrears, new figures revealed today.

Figures from Ofgem show that energy debt has more than tripled since the end of 2020, when the figure stood at £1.45bn.

The regulator reported that there are currently 1,133,683 electricity customers and 926,545 gas customers in debt without any repayment arrangement in place. 

The debt is leaving households facing up to an extra £145 a year on their bills to cover the collective shortfall.

End Fuel Poverty Coalition co-ordinator Simon Francis said: “Energy debt is now driving people into dangerous financial positions as we approach the fifth winter of the energy bills crisis.

“Previous research has found that almost one in five households in energy debt have turned to illegal money lenders, with households waking each morning fearful of what using electricity or gas might cost them.

“We must urgently write off arrears and reform the system so fewer households are powerless to pay off their debts.”

Ofgem confirmed that the regulator is working on plans to introduce a debt relief scheme. While welcoming the move, campaigners have warned it must be simple to understand and accessible.

A new analysis by think tank Common Wealth shows that 24 per cent of the average energy bill went towards pre-tax profits by the energy industry.

Robert Palmer, deputy director of Uplift, said: “Yet again while shareholders are celebrating rising prices and huge profits, people are facing stark choices of how to ration their energy.

“Only by supporting struggling households now, improving energy efficiency and getting us off expensive gas through homegrown renewable energy will ministers be able to get a grip on the situation.”

A government spokesman said: “We are working urgently with Ofgem to drive debt out of the system and help people with the cost of living, such as expanding the Warm Home Discount to over six million households this winter.

“We are also delivering an energy system that puts people first, with stronger customer protections including automatic compensation for when companies mistreat consumers.”

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