UK energy debt hits £6 billion as price cap set to rise

The UK's energy debt has reached £6 billion, according to data released by EnergyUK on Monday. This debt represents unpaid energy bills and arrears at the end of June 2026. The figure was discussed during a media call with journalists before Ofgem's anticipated announcement this week. Ofgem is expected to reveal a 4% rise in its domestic price cap, which would be the highest level in three years.

Currently, the unpaid energy debt is spread across all consumer bills, adding approximately £50 per year or around 3% to the average annual bill. If left unaddressed, the debt could reach £7 billion by year-end. Ofgem has been exploring options to help customers in debt, but a proposal to clear £500 million of debt for the poorest customers has yet to receive government backing.

Rising wholesale energy prices, primarily due to the Iran war, have been the main driver of the domestic price cap increase. Ofgem sets the cap quarterly using a formula that considers suppliers' network costs and environmental and social levies.