Customer energy debt in the UK is projected to reach £7 billion by the end of 2026, reflecting a significant and deepening squeeze on household finances, according to industry body Energy UK. The total amount owed by domestic customers had already climbed to an estimated £6 billion in the first half of the year.
The situation is expected to worsen with the upcoming announcement of the Ofgem energy price cap, slated for October. Forecasts suggest the cap will rise by approximately 4%, reaching a three-year high. This increase is anticipated to further strain household budgets, many of which are already struggling to manage current energy bills.
Energy UK reports that over three million customers are currently in debt to their energy suppliers, with an average outstanding amount of £1,800 per customer. Dhara Vyas, Chief Executive of Energy UK, highlighted the compounding problem: "The debt mountain is climbing higher, causing immense worry to many customers, adding growing costs to everyone’s bills and threatening suppliers’ financial viability." Vyas added that persistently high energy costs over recent years have led many households to accumulate debt that is becoming increasingly unmanageable, with affording the latest bill being a challenge in itself.