Insights ¦ Powering up support: unlocking better pathways from energy debt to debt advice

Key Take Aways

• Energy debt remains a significant risk, driven by the ongoing ‘permacrisis’ of high living costs despite falling energy prices.
• Over two-thirds of StepChange clients with energy arrears were already in communication with their supplier before seeking advice, indicating existing engagement points.
• Effective referral processes from energy suppliers to independent debt advice are crucial but currently inconsistent; there is significant room for optimisation.
• Empathy and clarity in supplier communication can reduce customer frustration, increase awareness of debt advice options, and aid earlier intervention.
• The majority of energy debt clients have complex needs, often compounded by vulnerabilities and health issues, which require tailored support.
• Repetition of information and poor data sharing cause distress and inefficiencies, suggesting the need for sector-wide investment in consumer data passporting.
• Post-referral communication gaps persist, often leading to unnecessary stress and repeated information sharing, impacting debt resolution effectiveness.
• The rising level of total energy debt in the UK, exceeding £4 billion by Q1 2025, correlates directly with financial pressures on households.
• Sectors such as energy, debt advice, and consumer protection must collaborate more effectively to prevent escalation into chronic debt problems.
• Implementing flexible payment plans, pausing collection during advice engagement, and offering support with extra needs improve debt management and customer outcomes.
• Good practice in communication, data sharing, and flexible managing tools within energy firms can help prevent households from falling deeper into debt.
• Strengthening sector coordination around awareness, referral pathways, and support measures can unlock significant improvements in energy debt outcomes.

Key Statistics

• 43% of StepChange clients with energy debt were referred by their energy supplier.
• 40% of clients referred by their supplier had no prior awareness of StepChange; this rises to 44% among first-time financial difficulties.
• 60% of survey respondents had made some progress on their energy debt after contacting StepChange.
• The total energy debt and arrears in the UK exceeded £4 billion in Q1 2025, a threefold increase since Q1 2020.
• Around 800,000 electricity and 670,000 gas smart-PPM users self-disconnected in Q1 2025.
• 52% of households reported unexpected large rises in energy bills over the past two years.
• 37% of respondents had agreed a payment plan they felt was unaffordable; 16% had plans they considered unaffordable.
• 17% experienced billing errors in the past two years; issues with incorrect billing remain prevalent.
• 54% of survey respondents said their supplier continued to chase them for arrears after engaging with debt advice.
• 55% of StepChange clients have a vulnerability characteristic alongside their debt.
• 27% of clients told their supplier about extra needs; 11% had unmet extra needs.
• 76% of respondents felt they had to repeat extensive information to debt advice providers.

Key Discussion Points

• The persistent impact of high living costs on energy and overall household debt levels.
• Existing points of contact between energy suppliers and customers can be better leveraged for early debt intervention.
• The importance of empathetic, clear communication in reducing customer frustration and improving support uptake.
• Current shortcomings in referral quality, including inconsistent processes, poor data sharing, and misaligned messaging.
• The necessity for sector-wide investment in systems that enable consumer data passporting to minimise repetitive disclosures.
• The critical role of tailored, accessible debt advice for households with complex and vulnerable circumstances.
• Post-referral information flows need strengthening to prevent customer harassment and ensure safety nets like Breathing Space are effective.
• The potential for flexible payment schemes and paused collection activities to result in better debt outcomes.
• Calls for a more coordinated approach among government, energy, and debt sectors to optimise referral pathways and support structures.
• The benefits of rigorous evaluation and monitoring of referral approaches to understand what works best for different client groups.
• Recognising the impact of poor communication and process inefficiencies on customer stress, trust, and debt outcomes.
• The role of responsible product design and sector collaboration in preventing households from falling into unmanageable debt.

Document Description

This article is an in-depth report published in October 2025 by the University of Bristol, examining pathways from energy debt to debt advice within the UK. It combines client data analysis, surveys, qualitative interviews, and stakeholder workshops to evaluate current practices and propose targeted interventions. The report offers a comprehensive set of long-term ambitions and quick wins aimed at improving referral quality, fostering sector collaboration, and better supporting vulnerable households facing energy debt. It advocates for a more coordinated ecosystem involving energy suppliers, debt advice providers, and consumer organisations to enhance energy debt resolution and prevent further financial hardship.