Thousands could have energy debt written off but bills would go up for others
Summary
Nearly 200,000 people receiving benefits in the UK might have their energy debts cancelled if they contribute toward their bills. This plan by regulator Ofgem could cost around £500 million and would involve adding £5 to each household's energy bill. The scheme aims to address a significant rise in energy debt, which has reached £4.4 billion.Key Facts
- Around 200,000 people on benefits in the UK could have their energy debt cancelled under a new plan.
- To qualify, participants must have built up over £100 in debt between April 2022 and March 2024.
- Eligible individuals need to make some payment towards their debts or agree to financial guidance from a debt charity.
- Energy debt in England, Wales, and Scotland has increased by £750 million in one year, reaching £4.4 billion.
- Ofgem proposes adding a £5 charge to all household energy bills to finance the debt relief.
- More than one million UK households currently have no debt repayment arrangements.
- The Energy Security and Net Zero Committee suggests using energy companies' excess profits to clear debts.
- Ofgem also plans to require new tenants and homeowners to register energy accounts to prevent anonymous debt accumulation.
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