British households owed £6 billion in unpaid energy bills and arrears at the end of June, according to industry group EnergyUK. The figure, published on Monday, marks a 17% increase from the same period last year and could climb to £7 billion by December without intervention.
The total includes arrears accumulated by customers unable to meet payments, with unpaid debt currently adding roughly £50 per year to a typical annual energy bill. A proposal to write off £500 million of debt for the poorest households remains stalled due to a lack of government legislation.
Ofgem is expected to raise its domestic price cap by 4% later this week, the regulator’s latest quarterly adjustment. The increase would push the cap to its highest level in three years, reflecting sustained pressure on household budgets. The price cap, which limits what suppliers can charge for default tariffs, is recalculated each quarter based on wholesale energy costs, network fees, and levies.
Wholesale energy prices have climbed this year amid geopolitical tensions tied to the conflict in Iran, a key driver of the cap’s upward trajectory. Suppliers’ network costs and regulatory levies also contribute to the final figure, though wholesale expenses remain the dominant factor in the calculation.
EnergyUK’s data underscores the financial strain on households amid volatile energy markets, with further increases in the price cap expected to exacerbate payment difficulties for vulnerable consumers.
