Crucial that energy suppliers and debt advice organisations work closely with people struggling to pay bills - Vikki Brownridge & Gary Booker
For households under financial pressure, an energy bill is rarely their only worry. It sits alongside housing costs, council tax, food, credit repayments and all the other regular payments competing for a household’s income.
When finances become stretched, keeping up with everything can quickly become difficult, and energy debt can gradually, or sometimes rapidly, build up. Energy UK predicts that customer energy debt will reach £7bn by the end of 2026, while the average level of energy arrears among StepChange clients is more than £2,500.
That is why it is crucial that energy suppliers and debt advice organisations work closely together to deliver positive outcomes for people struggling with their bills.
We see first-hand the difference that good debt advice and practical support can make. Advice is most effective when it considers someone’s full financial situation. For an energy customer struggling to pay, that means looking not only at their energy debt, but also at their wider income, expenditure and debts, while ensuring they can access all the support available to them.
The partnership between British Gas and StepChange shows what this can look like in practice. British Gas customers experiencing financial difficulty can be referred directly to StepChange for tailored debt advice, support to maximise their income, guidance on energy efficiency and help accessing further assistance. This provides customers with quicker, more joined-up support through a dedicated service.
The results underline the value of this approach. Among British Gas customers engaging with StepChange, around a quarter reduced their arrears, with an average reduction of £1,166. In addition, 26 per cent of customers who had previously been making no payments began repaying their debt. For people using this pathway, these changes represent important steps towards improving their financial situation.
The British Gas Energy Trust, an independent charity solely funded by British Gas, provides another vital source of support. It helps families and individuals who are experiencing, or are at risk of, financial hardship through grants, money management support and impartial advice.
British Gas has supported the Trust for more than 20 years and is committing a further £40m over the next five years to help thousands more people access the support they need. Last year alone, the Trust distributed more than £15.6m in grants and funding for over 100,000 people.
These outcomes demonstrate the value of putting the right support in place at the right time. They also show that energy suppliers, charities and debt advice organisations can achieve more by working together, with clear referral pathways connecting people to the most appropriate help.
However, energy debt remains a significant issue for households across the country, and further action is needed as consumer debt levels continue to rise. We want to see the introduction of a targeted social tariff to protect the most financially vulnerable households from energy affordability challenges, alongside the long-awaited Ofgem debt relief scheme to address debt accumulated during the pandemic and cost-of-living crisis.
Together, these measures could form part of a more effective safety net for households experiencing financial difficulty. Government, regulators, energy suppliers, charities and advice organisations all have a role to play in building that safety net and ensuring people can access support before their financial problems become more severe.
Vikki Brownridge is the CEO of StepChange and Gary Booker is managing director of British Gas.