British Gas, owned by Centrica, has issued a stark warning as household energy debt continues to escalate across the UK. Last year, the amount owed by residential customers soared to £1.04 billion, a significant increase from £799 million the previous year.
Serving 7.9 million homes, British Gas now faces financial pressures that place its earnings at the lower end of earlier forecasts. Centrica attributes this to “continued challenges in residential energy bad debt collection,” highlighting the widespread impact of rising energy costs and economic uncertainty.
The company pointed to a combination of factors fueling this debt surge: steep energy bills, ongoing cost-of-living difficulties, and the halted installation of prepayment meters—all contributing to increased overdue payments.
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Kevin O’Byrne, Centrica’s chairman, described energy debt as a “serious and growing challenge” demanding coordinated government intervention. He emphasized the need for a unified approach involving the government, regulators, suppliers, and charities to support those unable to pay while ensuring those who can pay do so, protecting the overall financial health of the energy market.
EDF, another major supplier covering three million homes, reported that one in four customers currently carries debt. An EDF spokesperson labeled the situation “totally unsustainable,” advocating reforms to guarantee payment accountability.
Political voices also weighed in. Claire Coutinho, the Conservative shadow energy secretary, criticized the government’s handling, blaming rising energy debts on policies from previous Labour leadership. Meanwhile, a Labour spokesperson affirmed ongoing collaboration with Ofgem to eliminate debt, including exploring a proposed Debt Relief Scheme.
As energy costs continue to bite, the growing debt crisis reflects deeper challenges within the UK’s energy market, demanding swift, cooperative action to aid struggling customers and stabilize the sector.