Energy Price Cap and Customer Debt

Introduction

The energy price cap and customer debt seem to be intrinsically linked in the last few years. With two huge shocks, namely Russia’s invasion of Ukraine and the USA going to war with Iran, the global energy market has lurched from one uncertainty to another.

The price cap was introduced to support households. But with other pressures outside of domestic energy, namely Petrol and Diesel, household debt is going up and not down.

Government Support

Today’s budget made announcements to remove the Standing Charge on Gas connections and give a cash injection of £100 to those on Council Tax Bands A-D. However, the Money Saving Expert doesn’t believe that is enough. Adding fuel to the fire, energy debt in the UK has topped £5 billion with average arrears over £2,500!

Energy Price Cap and Customer Debt

Energy price debt has seen a 13.6% year on year increase and with additional rises to come – the likelihood is this trend may rise or at least be ‘sticky.’ Higher energy prices have a knock on effect on prices and inflation, which in turn take money away from households.

Until energy prices subside, it’s safe to say consumer debt will be in a precarious position.

2027 and Beyond

The winter of 2026-2027 is surely to be one of discontent for many working class families struggling to make ends meet. The energy price cap is a mechanism to support those people, but the pressure on prices driven by world events is still upward.

Customers cannot work their way out of this situation without government support. Or without stabilisation in the global economy and political landscape. Energy debt is only one aspect of the challenges faced by UK households, but the spike in prices has made it a significant one.

At Saascoms we develop platforms for customer services, contact centres and debt collection. Our clients know the challenges their customers face on a daily basis, working alongside them on problem debt.