If you are struggling to pay energy bills, you have more protections than many people realise. Ofgem licence conditions impose significant obligations on energy suppliers around debt handling, repayment plans, and disconnection. This guide explains what suppliers must do, what you can demand, and how to access help.
See also: Fuel Poverty Help UK and Household Support Fund.
The Ofgem licence conditions on debt
Energy suppliers in Great Britain operate under Ofgem licence conditions that set minimum standards for debt handling. Key obligations include:
| Obligation | What it means |
|---|---|
| Income and expenditure assessment | Supplier must assess what you can afford before setting a repayment plan |
| Affordable repayment plan | Plan must not cause undue hardship |
| Debt referral | Must refer you to free debt advice services |
| Priority Services Register | Must identify and protect vulnerable customers |
| Disconnection as last resort | Must exhaust all alternatives before disconnection |
| Court warrant required | Cannot disconnect without a warrant for credit meter customers |
How energy debt is collected
Stage 1: Initial debt
If you miss a payment, the supplier will contact you — by letter, phone, email, or text. At this stage, act quickly. Contact the supplier and explain your situation. Most suppliers have a hardship team or a specialist debt team who can arrange a payment plan.
Stage 2: Repayment plan
The supplier must offer you a repayment plan based on your ability to pay. You have the right to:
- An income and expenditure assessment
- A plan that reflects your disposable income (not just the total debt)
- Time to clear the debt at an affordable rate — which may mean low monthly payments over a long period
A supplier cannot set a repayment plan at an amount you cannot afford, then disconnect you for failing to meet it. If you believe a plan is unaffordable, say so clearly in writing and request a reassessment.
Stage 3: Prepayment meter installation
If you are in debt and a repayment plan breaks down, suppliers may apply to install a prepayment meter, which collects ongoing energy costs plus a debt repayment element automatically. Since the 2023 Ofgem reforms, suppliers cannot forcibly install prepayment meters for vulnerable customers or those in difficult circumstances. A warrant is required in most cases.
Prepayment meters are not necessarily bad for debt management — they prevent debt growing further and the repayment is automatic. However, they carry risks of self-disconnection (running out of credit). See Prepayment Meter Renters Rights.
Stage 4: Disconnection
Disconnection for debt is a last resort. The process requires:
- Supplier must have exhausted payment plan, hardship fund, and PPM options
- Supplier must obtain a magistrates’ court warrant to enter and disconnect
- Notice must be given before disconnection
Absolute prohibition on disconnection:
- Premises with a registered medical dependency on electricity (Priority Services Register)
- Some vulnerable household types during October to March winter period
In practice, residential disconnections for debt are extremely rare in the UK.
Priority Services Register
The Priority Services Register (PSR) is a free scheme run by energy networks and suppliers for customers who need extra support. Being on the PSR provides:
- Protection from disconnection for certain vulnerability reasons
- Priority reconnection in the event of a power cut
- Password schemes to verify identity of callers
- Alternative formats for bills (large print, braille)
- Advance notice of planned interruptions
Who qualifies:
- Older people (65+)
- Disabled people
- Those with chronic illness
- Mental health conditions
- Those who are dependent on medical equipment
- Pregnant, or with young children
Register with your electricity network operator and your gas/electricity supplier separately — they are different registers. Registration is free.
Breathing Space — protection from debt collection
The Debt Respite Scheme (Breathing Space) offers protection for people in problem debt:
| Type | Duration | How to apply |
|---|---|---|
| Standard Breathing Space | 60 days | Through an authorised debt advisor (Citizens Advice, StepChange, National Debtline) |
| Mental Health Crisis Breathing Space | Length of mental health treatment + 30 days | Via a mental health professional or care coordinator |
During Breathing Space:
- Energy suppliers cannot pursue debt recovery
- Cannot add interest or charges to the energy debt
- Cannot start enforcement action (including warrant applications)
- Must pause debt collection activity
Breathing Space does not clear the debt — it gives you time to get debt advice and agree a plan.
Third Party Deductions — Fuel Direct
If you receive Universal Credit, Income Support, Pension Credit, ESA or JSA, you may be able to use Fuel Direct (Third Party Deductions). The DWP deducts a set amount from your benefit payment each month and pays it directly to your energy supplier against the debt.
Standard deduction rates (2026): set by DWP, typically around 5% of the standard allowance per debt.
To apply: speak to your work coach (UC) or contact DWP for legacy benefits. Your supplier can also request Fuel Direct.
Supplier hardship funds
Most major energy suppliers operate hardship funds that can write off or reduce energy debts for customers in genuine hardship:
| Supplier | Fund name |
|---|---|
| British Gas | British Gas Energy Trust |
| Octopus | Octo Assist Fund |
| E.ON | E.ON Energy Fund |
| Scottish Power | Scottish Power Hardship Fund |
| EDF | EDF Energy Customers Fund |
Hardship funds are not guaranteed — they are discretionary and have limited budgets. Apply via the supplier’s website or customer service. Citizens Advice can also help with applications.
Statute of limitations on energy debt
Under the Limitation Act 1980 (England and Wales), a debt becomes statute barred after 6 years if the creditor has not taken court action and the debtor has not acknowledged the debt in writing or made a payment.
In Scotland: the Prescription and Limitation (Scotland) Act 1973 applies — the limitation period is 5 years (short negative prescription).
Important caveats for energy debt:
- The limitation period runs from when the debt first fell due (when the bill was issued and unpaid)
- Making a payment or acknowledging the debt in writing resets the clock
- Even a statute barred debt does not disappear from your credit file immediately
- Suppliers may still be able to install a prepayment meter or affect supply, even if they cannot sue
Always seek advice from a free debt service (StepChange, National Debtline, Citizens Advice) before concluding a debt is statute barred.
Free debt advice
| Service | Contact | Notes |
|---|---|---|
| Citizens Advice | citizensadvice.org.uk | Local offices and national helpline |
| StepChange | stepchange.org | Online debt plan tool, free telephone advice |
| National Debtline | nationaldebtline.org | Webchat and telephone |
| MoneyHelper | moneyhelper.org.uk | Government-backed debt guidance |
| Breathing Space | Via debt advisor | Applies to all debts including energy |