Average debt level where there is no arrangement to repay the debt (arrears)

At-a-glance summary

The level of debt owed by domestic customers in arrears (who do not yet have a debt repayment arrangement set up) has generally risen since we started collecting data in Q1 2012 onwards. It peaked in Q2 2017 for gas and Q2 2016 for electricity.

The increase in the average debt is at least in part due to the continuing reductions in the number of customers in debt, which is largely among customers with lower levels of debt. We will continue to monitor this closely.

Relevance and further information

There continues to be a seasonal pattern to energy debt. Debt generally falls towards the end of the year, when customers who pay quarterly are billed for the warmer months. It then rises in the spring when customers who pay quarterly fall into arrears following higher energy usage during the winter months. This seasonal trend is more pronounced with gas, most likely due to the importance of gas heating during winter.

Methodology

A customer is in arrears if they have not paid a bill for longer than 91 days/13 weeks, and there is no formal arrangement to repay the debt. It excludes any costs for subsequent consumption. This will include customers who are billed in arrears for ongoing consumption, and direct debit customers who have fallen into debt by defaulting on one or more payments. It should exclude customers who have begun the transition to a formal debt repayment arrangement, but have not yet started repaying their debt.