Responding to Ofgem’s Debt Relief Scheme, Ned Hammond, Deputy Director (Customers) at Energy UK, said:
“The Debt Relief Scheme is an important first step towards tackling the massive amount of debt and will provide much-needed respite for those customers who will benefit. However, with household energy debt currently at a record £4.5bn, the scheme will need to be expanded to meaningfully address this problem and to reach those customers who won’t initially be covered.
“Growing debt is obviously a huge worry for those households owing money – and affects all customers who end up footing the bill – so the Government also needs to take action to cut electricity costs and introduce better targeted bill support for those who need it most.
“It is important that Ofgem prioritises those things that will make a real difference and help to stop debt building up in the first place – such as changing the process when people move into new properties – ahead of those that won’t, like the proposed Code of Practice.”
Notes to editors
- Currently when someone moves into a new home, energy accounts are switched to ‘occupier’. Bills build up under these anonymous accounts until the individual contacts a supplier to register.
- In the worst-case scenario this debt – which suppliers estimate accounts for between £1.1 and £1.7bn (up to a third) of the historic debt currently in the system – is never paid and is written off.
- Ofgem’s proposals could mitigate the build-up of debt when a customer moves in and before they have shared their details with their supplier.