Energy price hikes a “bitter blow” to households, but options are there for government

We respond to Ofgem's latest energy price cap hike

Posted August 26, 2026

Steve Vaid, Chief Executive of Money Advice Trust, the charity which runs National Debtline and Business Debtline, has responded to the announcement by Ofgem that household energy bills are set to reach a three-year high from this October when the new price cap takes effect. 

“Today’s announcement is another bitter blow to millions of households across the country. With energy bills set to reach a three-year high and customer energy debts climbing above £6 billion, government must act now to support struggling households and stem the rise in energy debt. 

“One immediate step ministers can take is to implement the first phase of the Energy Debt Relief Scheme. The scheme would provide much-needed relief by allowing energy suppliers to write off debts that households built during the energy crisis through no fault of their own. The consultation has already taken place. What is needed now is decisive action to bring the scheme into effect. 

“Energy debt remains one of the most common issues National Debtline advisers hear about. Without government intervention, more households risk being pushed into unmanageable debt.” 

National Debtline Figures 

  • Energy debt is the second most common debt type National Debtline advisers hear about behind credit cards 
  • Over a third (38%) of people who contact National Debtline have energy debt 
  • On average, people who contact National Debtline with energy debt owe £2,575 

Ofgem Debt Relief Scheme   

Ofgem’s proposed Debt Relief Scheme is designed to tackle the build-up of unpaid energy bills from the energy crisis by allowing suppliers to write off a portion of customer debt, with costs spread across the wider market. The aim is to support households struggling with arrears, reduce debt pressures on suppliers and create a more sustainable system for managing energy debt going forward.   The announcement of the scheme followed our Help To Repay campaign, backed by 14 charities and other organisations.  

Phase 1 which will support people receiving means-tested benefits has been consulted on. The regulator has yet to confirm firm timelines for when this will be implemented. Phase 2 which would support a wider group of customers has yet to be consulted on.