Domestic energy debt across Great Britain is projected to reach £7bn by the close of the year, according to warnings from Energy UK, a trade association representing suppliers. The figure represents a significant increase from the existing debt level of £6bn recorded at the end of June, which itself constituted a historical high for the sector.
The anticipated growth in unpaid energy bills stems largely from forecasted increases to the price cap governing household gas and electricity charges. The regulator is expected to announce a 4% increase in the price cap effective October, bringing it to a three-year peak. Energy industry representatives attribute the rise primarily to elevated costs for sourcing gas from global wholesale markets, with escalating expenses for upgrading Great Britain’s energy infrastructure also contributing meaningfully to overall energy pricing.
Under the new price structure, a typical household would face annualized gas and electricity expenses equivalent to £1,729 according to Cornwall Insight, a forecasting consultancy. The analysis assumes electricity rates will climb from 26.11p to 26.57p per kilowatt hour, while gas charges are expected to increase from 7.33p to 7.90p for customers on direct debit payment plans. Notably, energy consumption patterns have already begun shifting, as high costs have prompted many households to reduce their usage, thereby affecting the calculation methodology applied to the price cap.
Energy UK has called on the government to implement more substantive long-term solutions to address rising energy costs, specifically advocating for a social discount tariff rather than temporary relief measures. The industry group noted that a planned reduction in VAT on household electricity bills, intended to provide relief beginning in October, would be insufficient to counteract the price cap increase and would deliver only modest annual savings of approximately £45 per household.
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