New Ofgem figures reveal that household energy debt has soared to £4.43 billion in Q2 2025 – more than triple pre-energy crisis levels and three-quarters of a billion pounds more than this time last year – leaving millions of families trapped in arrears they cannot escape.
The latest data [1] shows:
- £1.45bn in debt and arrears at the end of 2020 (pre-crisis)
- £3.69bn last year (Q2 2024)
- £4.43bn in Q2 2025 (latest figures)
The regulator also reports that 1,133,683 electricity customers and 926,545 gas customers are now in debt without any repayment arrangement in place. Many households may owe on both accounts, meaning over a million households are struggling in energy debt.
The burden of this energy debt is shared by all bill-payers, with households facing up to an extra £145 a year on their bills to cover the collective cost of debt.
At the same time, new analysis from the Common Wealth think tank shows that around 24% of every household energy bill is taken as profit by the energy industry.
The regulator and Ministers are due to launch a new Debt Relief Scheme in the coming months, but while this is supported by members of the End Fuel Poverty Coalition, campaigners have warned it must be simple to understand and accessible. [2]
Debt experts have advised that it must include automatic eligibility for people on means-tested benefits, clear rules on what debt is covered, and flexibility in how households can apply. Experts have also stressed that suppliers should work with debt advice charities to ensure fair and consistent outcomes when implementing the scheme.
A spokesperson for the End Fuel Poverty Coalition, commented:
“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.”
Independent Age Policy Manager, David Southgate, said:
“Older people on low incomes are increasingly bed bound by the cold – forced to turn in early in hats, gloves, scarves, and extra blankets during the winter to stay warm. Many have fallen into debt in a bid to keep the heating on, with yet another difficult winter just around the corner, they need immediate support.
“We are calling on the UK Government to tackle this mountain of debt with a properly funded and targeted debt relief scheme, alongside wider affordability reform, including a national energy social tariff, to ensure everyone can afford to heat and power their homes.”
Frazer Scott, Chief Executive of Energy Action Scotland, said:
“The latest Ofgem figures show that there has been inadequate debt relief – and there is nothing in the pipeline to make energy genuinely affordable for the households that quite clearly cannot pay.
“The number of accounts in debt continues to rise, with average debts growing as well. Over £580 million in debt has been added in just the first six months of 2025. Without urgent intervention, this crisis will only deepen.”
Robert Palmer, deputy director of Uplift, commented:
“This is a saddening debt crisis for too many people in the UK and is driven in part by obscene profits. It’s just plain wrong that nearly a quarter of every household bill is taken as profit by the energy industry. What’s more, the UK’s heavy reliance on expensive gas added an average of £3,000 per household during the energy bills crisis.
“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.”
Jonathan Bean from Fuel Poverty Action, added:
“Energy debt will continue to grow whilst the Government fails to deliver its promised £300 bill reduction, with energy prices 70% higher than five years ago.”
Toby Murray, Policy and Campaigns Manager of Debt Justice, said:
“These figures are a shocking indictment of the government and Ofgem’s failure to act on the energy debt crisis. Record energy debts are leaving millions trapped in arrears for a basic essential, bringing stress and hardship to households already struggling to get by.
“Yet almost a year after Ofgem announced they were looking into a debt relief scheme, not a single household has seen their debts reduced. The government must act now and write off unpayable energy debt.”
ENDS
[1] Data taken from Ofgem’s interactive charts on https://www.ofgem.gov.uk/data/debt-and-arrears-indicators which have recently been updated. Specifically, the headline figures use the chart from total financial value of domestic customer debt and arrears (existing for more than 91 days). Key figures:
Q4 2020 (pre-crisis): £1.45bn
Q1 2022 (pre-Ukraine invasion): £1.81bn
Q2 2024 (pre-General Election): £3.69bn
Q3 2024: £3.82bn
Q4 2024: £3.85bn
Q1 2025: £4.15bn
Q2 2025 (latest): £4.43bn
[2] The End Fuel Poverty Coalition is calling for urgent reform to tackle the energy debt crisis, including:
- A Debt Relief Scheme with automatic eligibility for households on means-tested benefits and no arbitrary debt thresholds or forced customer contributions.
- An end to punitive late fees, additional charges and rigid repayment plans that push people deeper into hardship.
- Guaranteed protection for customers on prepayment meters, with relief available to those forced onto PPMs due to debt.
- Longer-term action to cut bills and prevent debt recurring, including a national social tariff, fairer standing charges and pricing structures and a major programme of home energy efficiency upgrades and homegrown renewables.