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StepChange response to Ofgem Call for Input

Affordability and debt in domestic retail market

May 2024

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Energy regulator Ofgem published a call for input on affordability and debt March this year, raising concerns about record high levels of energy debt and the number of households struggling to afford their bills.

We warmly welcomed Ofgem’s decision to explore this important topic. It is encouraging to see the regulator acknowledge the enduring, significant nature of the energy affordability challenge consumers are facing, and the need to make improvements to the wider debt pathway for those who find themselves falling behind on bills. Energy suppliers, Government and Ofgem all have a key role to play in bringing about crucial developments in these areas.

We continued to argue that comprehensive reform of the energy price model is needed to deliver long-term affordability to those at risk of fuel poverty, and to provide proper protection and support to those struggling with energy debts. The implementation of a social tariff in the energy market which protects vulnerable consumers, including those on the lowest incomes, alongside the adoption of a ‘Help to Repay’ style payment matching and debt relief scheme – plus other constructive reforms – would be significant steps in tackling the problem of energy affordability.

We also raised the pressing need to increase protections for, and improve the experiences of, customers struggling to keep up with energy bills and consequently interacting with the energy debt pathway. Key problems we continue to see at StepChange include energy suppliers failing to identify and take account of consumer vulnerability, suppliers making unaffordable demands for repayment, and the use of aggressive or inappropriate debt recovery methods. We set out in our response urgent steps to address these issues.