Record levels of energy debt part of ‘perfect storm’ for those struggling with essentials, says StepChange

^{31 March 2026}

New data from the energy regulator Ofgem illustrates the growing difficulty households are under as the cost of essentials continues to drive household pressures. Ofgem’s latest debt and arrears data shows that total energy debt has risen once again and now stands at a record £4.55 billion for the period to the end of 2025, up 18% year on year.

As essential bills like gas and electricity continue to drive the cost of living crisis, StepChange reveals that client volumes for the first quarter of 2026 are up over 11% year on year, with 50,000 clients advised.

StepChange has seen average energy arrears among its clients far outstrip inflation over the past few years. Since the last external price spike with Russia’s invasion of Ukraine:

• Average gas arrears between 2023 and 2025 are up 44%, now topping £1,610
• Average electricity arrears have also risen, totalling £2,036, up 35% in the same period

StepChange estimates that if these arrears were to have tracked the increase in cost of living since, gas and electricity debts would stand at around £1,270 and £1,720 respectively,^* showing that the scale of increasing energy debt is not just about rising prices but real incomes remaining stagnant alongside inadequate support mechanisms.

StepChange is therefore calling on the Government and the energy regulator to act at pace to protect households vulnerable to shocks by ensuring effective mechanisms are in place to respond rapidly to unfolding global events:

• Ofgem’s proposed Debt Relief Scheme is a welcome intervention, but it must be implemented now – and the current global context makes it clear that this alone won’t be enough to tackle either the buildup of unsustainable debt levels or the ongoing affordability problem.
• The Department for Energy, Security, and Net Zero must prioritise introducing a social tariff, which can act as a tool for energy providers to support the most vulnerable, rather than expose them to the risks of higher, unmanageable arrears.
• The regulator must also act to improve industry debt collection standards, ensuring suppliers are taking people’s holistic ability to pay into account and treating them with compassion.

Peter Tutton, Director of Policy, Research, and Public Affairs, said:

“This data confirms what we already knew from our advisors - persistently high energy bills and other essential costs are converging to form a perfect storm which will push households further into difficulty. With total energy debt now reaching staggering levels that we expect to rise further as the impact of the Middle East crisis filters through, we need urgent action from the Government and Ofgem on both the proposed Debt Relief Scheme and a social tariff for energy.

“Whilst the price cap remains in place until July and from April bills will be slightly cheaper as the ECO scheme concludes and the Renewables Obligation policy moves into general taxation, this reduction is instantly wiped out by average increases in council tax and water, as well as the looming increase in energy bills this autumn and winter, which will push millions of household budgets to their limit.”

Notes to Editors

1. Ofgem’s latest energy debt and arrears data can be accessed here: Debt and arrears indicators | Ofgem
2. Average gas and electricity arrears data is taken from StepChange’s Stats Yearbook 2023 and 2025.
3. ^* This calculation is based on how the 2023 gas and electricity arrears level would have changed if they had tracked inflation (CPIH). It is purely illustrative to show the rate at which arrears have risen in comparison to income, bills, and prices.