Millions unaware of available support with household bills as debt soars

New research from the National Audit Office (NAO) has revealed that millions are missing out on vital support with energy and water bills. This comes as over £7 billion worth of debt is owed to energy and water companies.

The report examined how Ofcom, Ofwat and Ofgem support consumers in vulnerable circumstances and whether people can access the help they need from essential service providers.

The watchdog found a marked increase in household energy debt following Russia’s invasion of Ukraine, with debt more than double its 2021 level, up 118%.

Since the NAO’s last report on this topic in 2019, regulators have strengthened protections, introducing new rules on how companies treat customers and taking enforcement action – for example, changing company licences to improve customer service and issuing multi-million-pound fines to providers where service and performance fall short of expectations. Now, NAO finds the regulators must make changes to keep pace with consumer needs.

Consumers still struggle to contact their providers and are not always aware of support available to help manage their bills – such as social tariffs and repayment plans. The NAO found only a third of eligible broadband customers and 39% of water customers who are struggling to pay their bills are aware of social tariffs, meaning people on low incomes and in vulnerable circumstances could be missing out on support to help manage debt. Energy customers on repayment plans owe around £1,000 less than those without one in place.

Ofwat and Ofgem have overseen an uptake in registration for company priority services registers (PSR)3, although consumer awareness remains low. The PSR does not extend to the broadband sector, which has separate requirements. Ofcom does not routinely monitor take-up or awareness of support.

The NAO found regulators are not aligning their performance measurements with actual consumer experiences and outcomes.

Gareth Davies, Head of the NAO said “Regulators have made progress to support consumers, but they’re not keeping up with the pressure now facing millions of households. With debt rising sharply, it’s more important than ever to make regulation work so that people know what support is available and can contact essential providers when they need to.”

StepChange Debt Charity has welcomed the findings, which reflect its own data showing a sharp rise in arrears among its clients, with average energy arrears increasing by 79% and water arrears by 33% since 2021.

Meanwhile, polling commissioned by the charity found that almost half of British adults (45%) are worried about their ability to pay energy bills over the next six months, and 28% are worried about their ability to pay water bills.

In response, StepChange is calling for the urgent introduction of national social tariffs for energy and water.

Emily Whitford, Senior Public Policy Advocate at StepChange, said “We’ve seen staggering rises in energy and water arrears over the past five years among StepChange clients, and we’re only facing a worsening crisis without meaningful intervention on affordability from Government.

“The cost of these essentials is placing unsustainable pressure on millions of financially vulnerable households. Tiered national social tariffs across both energy and water would provide targeted, effective support for those who need it most.

“It’s also vital that Ofgem works with suppliers to strengthen support for customers struggling with energy debt. This should include implementing an effective Debt Relief Scheme as soon as possible to help customers with energy debt incurred during the period of historically high prices to repay affordably.”