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StepChange response to Ofgem consultation on phase 1 of the Debt Relief Scheme – January 2026

Read our response

Ofgem published a statutory consultation on its proposed Debt Relief Scheme (DRS).

We welcomed Ofgem’s decision to introduce the DRS and broadly support the proposed phase 1 scheme design, which will extend energy debt relief to a wide group of financial vulnerable consumers that stand to benefit from debt write-off and wider support from suppliers.

Our response highlighted four areas where we called on Ofgem to develop its final design approach and guidance:

  • We remain concerned that some non-engaged customers in the most difficult circumstances will miss out on debt relief because they face the highest barriers to engagement. Ofgem had set out some steps for suppliers to seek to engage these customers and we proposed how Ofgem can strengthen its expectations of suppliers to make sustained efforts to engage eligible customers.
  • There are risks the scheme inadvertently drives poor outcomes for some ‘eligible but non-automatically engaged’ customers because if they take actions like making unaffordable payments to meet engagement criteria. The guidance indicates Ofgem is relying on supplier BAU processes to support eligible customers, but StepChange regularly hears from customers who have had poor experiences with suppliers. We would like Ofgem to develop its guidance to highlight particular factors and risks relevant to supporting eligible customers vulnerable to pooor outcomes.
  • There are unclear potential impacts on FCA-regulated debt advice: advice providers do not have capacity to meet a significant unfunded increase in demand driven by the scheme, and funded arrangements require time to implement. Ofgem’s draft guidance for suppliers notes that it will monitor impacts of the scheme on advice demand and act if needed: we would welcome more detail on Ofgem’s expectations and approach.
  • Finally, we highlighted specific design points we would like Ofgem to address more clearly in its final guidance. For example, we would like Ofgem to be clearer that a part payment in any billing period meets the engagement criteria, which is particularly important in light of the different lengths of billing periods to ensure fair access to the scheme.