Ofgem Energy Redress Scheme supports one million customers with record £250 million funding

Fuel vouchers worth more than £60 million, energy-saving advice, and support for more than one million customers has been funded by a record £250 million recovered by the energy regulator Ofgem from firms that breach its rules.

The funds recovered by Ofgem are redistributed as grants which have supported 887 projects delivering benefits to energy consumers across Great Britain since the scheme's inception in 2018.

Funds have also supported the development of innovative clean power projects including community-owned renewable energy projects which use some of their profits to support people struggling to stay warm over winter. 

Since 2020, more than £500 million has been returned to consumers through a combination of fines, compensation and redress. This includes direct compensation for affected customers, as well as voluntary payments into Ofgem’s redress fund.

Recent compliance cases include British Gas, for example, which paid £20 million into the fund following Ofgem’s investigation into the installation of prepayment meters without customers’ consent, breaching protections for vulnerable consumers.

In a separate case in March, National Grid Electricity Transmission also contributed £20 million for failing to properly monitor, maintain and repair some assets of an integral substation.

Mark McAllister, Chair of Ofgem, said: 

“Protecting consumers and ensuring they’re treated fairly is central to our mission, and these significant milestones reflect our commitment to raising standards across the energy sector.

“Most energy companies provide a good standard of service, and the majority of consumers are satisfied with the outcome. But when companies fail to meet their obligations, we ensure they put things right. The Energy Redress Scheme shows how money paid by companies that break the rules can be used to make a real difference.

“The fund has provided a lifeline to over a million consumers and helped lower energy costs for thousands. It’s also vital for supporting innovative clean power projects to boost homegrown renewable energy that will support generations to come.”

Energy Secretary Miatta Fahnbulleh said:

"The Energy Redress Scheme is a brilliant initiative, and I welcome Ofgem achieving this milestone in giving back to over one million people who need it most.

"Energy is an essential good and must be available to everyone at a price they can afford, no matter where they live or what circumstances they are in.

"That is why we cut VAT on electricity bills and extended the Warm Home Discount to around six million households, to give families breathing space and begin to tackle the affordability crisis."

Mike Thornton, Chief Executive at Energy Saving Trust, which operates the Redress Fund on Ofgem's behalf, said:

“Reaching more than one million people is a remarkable milestone and a testament to the commitment of the charities, community groups and partners funded by the Energy Redress Scheme. We’re proud to deliver the scheme on behalf of Ofgem and support organisations that are committed to making a difference to people’s lives. This funding helps households facing immediate challenges whilst also supporting innovative projects that will strengthen communities and contribute to a more affordable, resilient energy future.”

Ofgem Chair McAllister spoke during a visit to the Edinburgh team at Children First, Scotland's national children’s charity which has received significant redress funding. This money supports the charity's vital work to protect children from harm, help them recover from trauma and abuse, and support children, families and carers with emotional, practical and financial assistance. 

The latest official government data from March this year shows that around one in five children in Scotland are living in poverty.

Since April 2024, Children First has helped 3,615 households experiencing energy-related challenges, financial hardship and long-term poverty across Scotland. This includes almost 2,500 home visits, more than 4,700 energy advice calls and 1,200 crisis payments.

The charity was recently awarded £411,000 from the redress fund over a two-year period to provide its financial wellbeing advisors with qualifications and training to continue supporting its children and families.

Mary Glasgow, Chief Executive, Children First, said: 

“The Redress Fund is transforming the lives of thousands of families across Scotland helping them to overcome financial hardship and build brighter futures for their children.

“By weaving high quality energy advice into the wider emotional, practical and financial wellbeing help we offer through our national support line and in local communities, we’re preventing energy challenges becoming a crisis, building families’ resilience and helping to improve the lives of children across the country. 

"Any family in Scotland in need of support can call Children First on 08000 28 22 33 or start a webchat at http://www.childrenfirst.org.uk/supportline.”

Notes to editors

About the Energy Redress Scheme 

Ofgem collects voluntary payments from companies that may have breached Ofgem administered rules. Energy Saving Trust manages the allocation of payments made into the energy redress fund, which has been in place for eight years.   

Licence breaches can range from incorrect billing and poor customer service and complaint handling by energy suppliers, to abuse of wholesale energy markets by generators.

Registered Charities, Community Interest Companies, Co-operative and Community Benefit Societies can apply for funds through four funding streams, to deliver energy related projects that meet the scheme priorities. 

The scheme prioritises support for vulnerable energy consumers, the development of innovative products or services and the empowerment of consumers to reduce their carbon emissions. 

The projects it supports include:    

• impartial energy advice services supporting vulnerable people. The estimated annual bill savings from energy advice provided through the scheme is more than £62 million alone
• digital media to engage hard-to-reach audiences with energy issues and the support that is available to them
• research projects aimed at making sure that the needs of elderly people and disabled people are met by new energy technologies
• boosting the uptake of whole-house retrofits
• trialling new business models or interventions to allow households to use more locally generated energy.

Follow the Energy Redress Scheme on X, LinkedIn and Facebook. 

About Children First 

Children First is Scotland’s national children’s charity. Children First stands up for every child because all children should have a safe childhood.

The charity protects children from harm and supports them to recover from trauma and abuse in their homes, schools and communities and through its national support line.

Children First helps children, their families and the people that care for them by offering emotional, practical, and financial support.

Children First is here to give children hope and a safer, brighter future.

Families in Scotland can get help from Children First’s support line seven days a week, Monday to Friday, 9am–9pm and weekends, 9am–noon by calling free on 08000 28 22 33 or starting a webchat.