Households in Great Britain could owe energy suppliers up to £7 billion by the end of the year, according to the trade group Energy UK. This estimate follows a rise in domestic energy debt and unpaid bills, which climbed by £500 million over the past year to a record £6 billion at the end of June. The increase is linked to rising gas and electricity prices, worsened by ongoing geopolitical tensions in the Middle East.
Key Details
The expected rise in energy costs is likely to push the energy price cap to a three-year high. Ofgem, the energy regulator, is projected to confirm a 4% increase in the price cap, effective from October. This increase will offset the new Prime Minister's plan to cut VAT on household electricity bills, which was expected to lower costs by an average of £45 per year. Dhara Vyas, chief executive of Energy UK, stressed the need for a more permanent solution to rising energy bills. She suggested a social discount tariff to assist households in need.
Background
Complaints about energy bills have surged, with a 16% increase in cases accepted by the Energy Ombudsman during the first half of 2026. The Ombudsman accepted 46,532 cases, up from 40,068 in the same period last year. Billing disputes made up 58% of complaints, showing the financial strain many households are facing as energy costs rise. Ed Dodman, chief ombudsman for energy, highlighted the importance of ensuring consumers can access fair resolutions when issues arise.
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Rising energy costs and increasing household debt are likely to pressure consumer spending. This could impact sectors that rely on discretionary income. Investors will watch for Ofgem's announcement on the energy price cap, which is expected to clarify the financial landscape for consumers and energy suppliers.
Based on reporting by: theguardian.com, independent.co.uk