EDF Energy has said the energy debt of the United Kingdom is ‘out of control’ as energy prices are set to be raised next year.
Ofgem currently allows energy suppliers to hike customers’ bills to help cover the outstanding debt of others who can’t keep up with payments.
EDF’s new report found that payments could rise by an additional £75 each year for its more than 5,000,000 customers.
The price hike is intended to tackle the estimated £7,000,000,000 energy debt the UK has.
‘Industry experts have estimated that debt reaching £7bn this year would require a further £10 to £15 per year to be added, driving up energy bills further and pushing more households into debt,’ EDF said.
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Last year, Ofgem announced it planned to increase annual energy costs by £5 per household in 2027 and 2028.
Ofgem said the price rise could be lower depending on how the scheme is taken up, and expects this will be somewhat offset by the measures reducing how much customers pay towards debt-related costs.
Currently, £52 is added to annual household energy bills under the current price cap via a debt allowance to cover energy debts that are never paid and have to be written off.
Figures published by Ofgem in September showed that the money owed to suppliers by households in England, Scotland and Wales surged to a new record high of £4.4 billion by the end of June 2025.
The average debt for people who do not have a repayment plan with their provider currently stands at about £1,716 per household.
Ofgem said that in a worst-case scenario, between £1.1 billion and £1.7 billion of historic debt, according to supplier estimates, is never paid and will be written off.
In March, energy market experts said that household energy prices would increase by almost a fifth when the price cap is announced this summer.
The April price cap was set at £1,641 per year for a typical UK home by energy regulator Ofgem before the war in Iran resulted in a spike in costs.
That spike will likely instead be taken into account when the fresh cap is announced in a matter of weeks, ahead of it coming into effect in July.
According to Cornwall Insight, that will mean an increase of £288 or 18% in annual bills.
In a post on X, the consultancy firm said ‘infrastructure damage and continued disruption to marine traffic through the Strait of Hormuz are limiting the potential for any meaningful wholesale price fall’.
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