Energy & Climate
The energy price cap
TUC calls for social tariff to cut energy bills for two-thirds of households.
1 July 2026
Britain’s households collectively owe energy suppliers a record £4.55 billion, a debt mountain that has more than tripled since before the energy crisis began.
The figure – the latest from Ofgem – has surged by more than £750 million in a single year. For context, total energy debt sat at roughly £1.45 billion at the end of 2020.
Average electricity arrears reached £1,773 per debtor in Q4 2025, up 10% year on year, while average gas arrears stood at £1,512.
Between 2023 and 2025, electricity arrears climbed 35% and gas arrears soared by 44%, according to debt charity StepChange.
‘The figures we are seeing on energy debt represent real families making impossible choices every day.
‘When the average electricity arrear has risen 35% in two years, it tells us the measures in place are not reaching the root of the problem. People do not fall into energy debt because they are careless with money; they fall into debt because their homes are inefficient.’
MANAN SHAH
Co-founder of Solar4Good
The crisis runs deeper than the arrears headline. Over 1.1 million electricity customers and 926,000 gas customers are in debt with no active repayment arrangement in place.
Suppliers recover the shortfall by spreading it across all bill payers, meaning every household in the country effectively pays an estimated extra £145 a year to cover the cost of others’ unpaid debts.
‘The £145 that every household effectively contributes each year to cover shared energy debt is a hidden tax that nobody talks about. It is regressive, falls hardest on those with the smallest budgets, and will keep rising unless we make real progress on home energy efficiency.
‘Solar panels, insulation, heat pumps, these are not luxury upgrades. Research from the Resolution Foundation shows a well-targeted solar programme could help one in three fuel-poor households escape the trap they are in.’
MANAN SHAH
Co-founder of Solar4Good
The Department for Energy Security and Net Zero (DESNZ) confirmed in its 2026 Annual Fuel Poverty Statistics that 2.36 million households in England remain in fuel poverty under the Low Income Low Energy Efficiency (LILEE) metric.
The average fuel poverty gap, the annual saving a household needs to escape the definition, stands at £379. Across England, the aggregate gap amounts to £896 million per year.
Using a wider measure, the picture is more severe still. DESNZ data shows 7.63 million English households, just over 30%, spend more than 10% of their income on energy.
Research from the University of York puts the UK-wide figure at 12.1 million, with almost five million spending more than 20% of their income on gas and electricity alone.
‘The government’s flagship energy efficiency programme, the Warm Homes Plan, will commit £15 billion which is welcome, but only if it reaches the right homes. We work with clients throughout the country, and know that the coldest, least efficient properties in the lowest-income areas.
‘It also won’t affect commercial properties such as care homes and schools which may face the same issues.
‘The households most likely to be in energy debt are, almost by definition, the same households least able to navigate complex application processes. Accessibility matters as much as ambition. We need delivery that meets people where they are.’
MANAN SHAH
Co-founder of Solar4Good
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