Ofgem's energy debt write-off: who qualifies and what January's bills mean

Ofgem’s plan to clear some of the debt left by the energy crisis was meant to start in early 2026. As of 23 October 2026, it still hadn’t launched. Meanwhile the price cap rose by 4% on 1 October, and analysts expect a bigger rise in January. Here’s where things stand, and what to do if you’re behind.

What is Ofgem’s Debt Relief Scheme?

The Debt Relief Scheme is Ofgem’s plan to write off part of the debt that built up when energy prices soared. Ofgem says the first phase could help around 195,000 customers by writing off up to £500 million.

Under Ofgem’s plans, to qualify for the first phase you would need to:

• get a means-tested benefit, such as Universal Credit
• have more than £100 of energy debt
• have built up that debt between April 2022 and March 2024
• be paying something towards your debt or your ongoing energy use or, if you can’t at the moment, be willing to work with a debt advice charity

Suppliers would find eligible customers using benefit information shared by the Department for Work and Pensions (DWP), then offer them the write-off. Ofgem has also proposed a second phase for other customers in genuine payment difficulty, with no date yet.

The cost would be spread across everyone’s bills. When it announced the plan, Ofgem estimated it would add about £5 a year to a typical bill from 2027, and said the figure could be lower depending on take-up.

Why hasn’t it started?

Ofgem consulted on the detailed rules in November and December 2025 and planned to launch in early 2026. But the scheme depended on a change in the law to let suppliers and the DWP share data about who gets benefits.

Those rules, the Digital Government (Disclosure of Information) Regulations 2026, came into force on 18 September 2026. At the time of writing, we couldn’t find a final decision from Ofgem or a confirmed start date. Until your supplier contacts you about it, assume your energy debt still needs dealing with.

What’s happening to energy bills in January?

Both figures are for a typical household using gas and electricity and paying by direct debit. The cap limits unit rates and standing charges, not your total bill, so what you pay depends on how much you use.

The January figure is a forecast, not a decision. Ofgem says it will announce the cap for January to March 2027 by 25 November 2026, and wholesale prices can still move before then. You also use more energy in winter, so arrears can grow quickly.

What to do now if you’re behind

1. Talk to your supplier. Ofgem’s rules mean your supplier must work with you to agree a payment plan you can afford. You can ask for a review of your payments, a payment break or reduction, or more time to pay.
2. Keep paying something towards the energy you use, if you can. It stops the debt growing, and the write-off scheme expects people to contribute where they can.
3. Check the Warm Home Discount. It’s £150 off your electricity bill this winter. In England and Wales you qualify if you were getting a means-tested benefit such as Universal Credit, Pension Credit or Housing Benefit on 23 August 2026, and your supplier takes part. Most people get it automatically.
4. Ask about hardship funds. Ofgem says many suppliers offer grants from trust funds that can help clear arrears. The British Gas Energy Trust accepts applications from customers of any supplier. Some funds ask you to get debt advice first.
5. Know the prepayment meter rules. Suppliers must follow strict rules before fitting a prepayment meter without your agreement. Read behind on energy bills? Prepayment meter rules and getting help.

Energy debt and debt solutions

Gas and electricity arrears are a priority debt, because your supplier can fit a prepayment meter or take you to court. They can still be included in formal debt solutions:

• Breathing Space pauses most creditor action for 60 days, but you must keep paying for current use
• a Debt Relief Order can include energy arrears if you have a low income and few assets
• an IVA can usually include them too

If you have other debts too, a DRO might deal with them all at once, without waiting for a scheme that has no start date. Try our DRO checker, or speak to a free debt advice service.

Frequently asked questions

Do I need to apply for Ofgem’s energy debt write-off?

No. Under Ofgem’s plans, suppliers would identify eligible customers using benefit data from the DWP. Be wary of anyone offering to apply for you for a fee.

When will the Debt Relief Scheme start?

No date has been confirmed. The law allowing benefit data to be shared came into force on 18 September 2026, but Ofgem hadn’t announced a start date at the time of writing.

Will it clear all my energy debt?

Not necessarily. The first phase is aimed at debt built up between April 2022 and March 2024, so arrears from before or after that may not be covered.

Can energy debt go into a DRO?

Yes. Energy arrears can be included in a DRO, an IVA or Breathing Space. You still need to pay for the energy you use from now on.

Sources

• Ofgem, Ofgem to set out plan to ‘reset and reform’ growing energy debt
• Ofgem, Debt Relief Scheme: statutory consultation
• legislation.gov.uk, The Digital Government (Disclosure of Information) Regulations 2026
• Ofgem, Energy price cap will rise by 4% from October 2026
• Cornwall Insight, 16% price cap rise forecast in January
• GOV.UK, Households to receive £150 Warm Home Discount confirmation letter