Energy industry groups are projecting a significant rise in unpaid utility bills across Great Britain as households face mounting pressure from higher gas and electricity costs. The amount of domestic energy debt—defined as payments overdue for more than 30 days—climbed to £6bn by the end of June, representing a £500m increase over the previous year. Trade associations estimate this figure could accelerate to approximately £7bn by the end of the year.
The anticipated rise in energy debt stems largely from a planned increase in the energy price cap. The regulator is expected to announce a 4% increase on the cap for millions of households beginning in October. Under the new cap, a typical household could face annual gas and electricity bills around £1,729, though actual costs vary based on individual consumption patterns. Industry analysts note that wholesale gas market pricing, influenced by ongoing geopolitical tensions in the Middle East, represents the primary driver of rising energy costs, with network upgrade expenses also contributing to overall bill increases.
The government’s announcement of a value-added tax reduction on household electricity bills, intended to provide relief of approximately £45 annually, is expected to be substantially offset by the price cap increase. Energy UK, the industry’s primary trade association, has called for more comprehensive policy solutions, including a social discount tariff structure, arguing that current stopgap measures prove both insufficient and costly. The organization notes that energy bills represent a particular strain on vulnerable households, with rising consumption costs contributing to widespread debt accumulation and reduced energy usage patterns among financially pressured consumers.
Ofgem, the energy regulator, maintains official debt figures approximately £1bn lower than industry estimates, counting only bills overdue for 90 days or more. Despite reporting lower publicly stated figures, Ofgem spreads the cost of unpaid bills across all consumers through the billing system, currently adding roughly £50 annually to typical household bills.
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