Warning millions of UK households missing out on energy bill support as debt climbs to £7bn

Millions of households are left without support for essential bills such as water, energy and broadband as debts to companies rise to more than £7bn, the public spending watchdog said.

The National Audit Office (NAO) found that only a third of eligible broadband customers and 39% of water customers struggling to pay their bills were aware of social tariffs; This means those who are vulnerable or on low incomes may miss out on support to help manage debt.

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

It concluded that regulators failed to align performance measurements with actual consumer experiences and outcomes.

Although Ofgem and Ofwat monitored registration uptake for company priority service registrations (PSR), Ofcom did not routinely monitor support uptake or support awareness for broadband customers, while consumer awareness remained low.

There was a significant increase in household energy debt following Russia’s invasion of Ukraine, rising by 118% since 2021, the watchdog said.

The NAO found energy customers with supportive repayment plans owed around £1,000 less than those without a plan.

The NAO found regulators have strengthened protections, introduced new rules on how companies treat customers and taken enforcement measures since its last report in 2019.

But regulators now need to make changes to keep up with consumer needs, he said, finding that customers were still struggling to contact their providers and were not always aware of support available to help manage their bills, such as social tariffs and repayment plans.

It recommended regulators raise awareness of the benefits available, such as social tariffs, repayment plans and other support schemes, and tackle the drivers of rising debt, such as inaccurate billing, delays in people moving home and barriers preventing consumers from switching tariffs.

They were also called on to improve the way vulnerable consumers are identified and supported and to make better use of cross-sector data sharing.

NAO chief executive Gareth Davies said: “Regulators have made progress to support consumers but they are currently failing to keep pace with the pressure millions of households face.

“With debt rising sharply, it is more important than ever that regulations work so people know what support is available and can contact essential providers when they need it.”

Sir Geoffrey Clifton-Brown, Chairman of the Public Accounts Committee, said: “Price volatility is now the norm across much of the energy sector and consumers are at the sharp end of it.

“Debt to energy companies has more than doubled since 2021, but too many households are still not receiving, or even aware of, support to manage rising costs.

“Regulators have a critical role to play, but today’s NAO report shows that regulations are still failing consumers on water, energy and broadband.

“It is still very difficult for consumers to contact companies when things go wrong, financial support is under-promoted and basic billing errors drive households further into debt.

“Whilst Ofgem, Ofcom and Ofwat have made some progress, they now need to act with greater urgency to ensure consumers receive the standard of service they deserve.”

An Ofwat spokesperson said: “We know further progress is needed to deliver better outcomes for consumers, particularly those experiencing vulnerability and during supply incidents.

“Protecting consumers who need extra help remains a key priority for Ofwat and we continue to work with Defra to improve outcomes for customers during this period of reform in the water sector.”

Ofgem said: “Energy debt remains a major challenge and we are taking action to reset the way it is managed.

“We continue to work with the Government on a targeted Debt Relief Program to address historic debt, as well as reforming the process people follow when moving house and creating energy accounts to avoid debt build-up.

“We are also pushing providers to do more, including prioritizing accurate billing and early engagement to offer fair, affordable repayment plans and ensuring they meet the needs of our most vulnerable customers.”