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 2012

In the last year Q4 2016 to Q4 2017 there has been a small fall in average levels of arrears for both Gas and Electricity

The trend increase in the average arears is at least in part due to reductions in the total number of customers in debt, as customers with lower levels of debt clear their arrears leaving fewer customers with higher levels of arrears. 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 are billed for the warmer months. It then rises in the spring when customers 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.