Ofgem to write off £500m debt and reclaim £240m from closed accounts

The energy regulator Ofgem has announced a two-part intervention aimed at easing pressure on households: up to £500 million of historic energy debt will be written off and consumers are being urged to reclaim about £240 million sitting in closed accounts. The debt-relief scheme, expected to launch early next year, will target people in receipt of means-tested benefits with more than £100 of energy arrears; officials say the move will help roughly 195,000 households and relieve long-standing balances that built up during the energy crisis.

Ofgem said the first phase of the scheme will focus on customers with the most acute need who are either contributing toward their debts and energy use or are prepared to work with debt advice charities to manage repayments. The regulator said the average debt for households without a repayment plan stands at about £1,716, and household arrears across England, Scotland and Wales reached a record £4.4 billion by the end of June. Charlotte Friel, Ofgem’s director for retail pricing and systems, said, "We know the growing amount of debt in the energy system is a significant challenge. We must protect consumers by striking the right balance...