Ofgem Plans £500M Energy Debt Write-Off Amidst £5 Bill Rise

The UK energy regulator Ofgem has announced plans to write off up to £500 million of historic energy bill debt accumulated by approximately 195,000 struggling households during the recent energy crisis. This debt relief scheme, set to launch in early 2026, targets customers on means-tested benefits who accrued debts over £100 between April 2022 and March 2024, with eligibility contingent on some debt contribution or engagement with debt advice. To cover this cost, an additional £5 per year will be added to the energy bills of all households by 2027-28, effectively socializing the debt repayment across millions of consumers. Ofgem aims to reform debt management and trial new processes for energy account setups when occupants move to prevent future debt accumulation in anonymous accounts. While the £500 million write-off addresses part of the £4.4 billion total energy debt, further costs may be passed on to bill payers, a move welcomed by debt charities but criticized for shifting burdens onto financially stable households. The ongoing high energy prices, still 50% above pre-crisis levels, underscore the importance of balancing support for vulnerable consumers with overall cost management.