Action needed for most vulnerable to tackle rising debt on bills

• Energy debt continues to rise: 53,000 more EDF cash/cheque customers are in debt compared to a year ago and total debt among CC customers has increased by over £70m year on year
• Since last year, EDF has spent £27m on initiatives to help customers. The supplier has installed over 50% of measures across all suppliers as part of the Great British Insulation Scheme (GBIS)
• Increases in debt come as EDF forecasts energy bills will increase by £146 for average bill payers on Ofgem’s price cap in October
• EDF is setting out three urgent priorities for the new Government on energy affordability: 
  • launch a review of key energy efficiency schemes
  • take action to introduce targeted energy bill support
  • create central cross-utility database of vulnerable customers.

EDF has seen an increase in the number of customers with a cash/cheque debt - those who pay when they receive their energy bill for what they have used in the previous quarter - since last year with approximately 470k customers with a debit balance on their account totalling £518m, an increase of over £70m compared to this time last year.

The impact of increased prices caused by high wholesale costs, coupled with the cost-of-living-crisis, has had a major impact on consumer energy debt, with the value of CC debt increasing 65% since 2022, while the average debt per customer is up by over 45% and sits at over £1100. Total UK Domestic Debt has increased by 54% in last 12 months.

EDF is investing all its profits back into Britain to help bring down future costs for customers and the country achieve net zero, while remaining committed to supporting those customers most in need. The energy supplier has spent £27m since last October on initiatives to help vulnerable customers, including direct financial assistance to customers in debt.

EDF's measures have helped reduce the average amount of customer debt of those it supported by 21%, but this has not stemmed overall numbers of customers falling into debt from increasing.

While targeted bill support could make an immediate impact on customer costs, changes to the Great British Insulation Scheme, which provides funding for loft, cavity and wall installations for free, should also be reformed to help customers save cash and carbon for the long-term. The scheme is vital given that the price of each unit of energy remains well above previous levels and provides an opportunity to cut bills permanently by helping customers to use less by insulating their homes.

The supplier is committing further support to help customers this winter and is setting out three priorities for the new Government to consider on energy affordability:

1. Review of Great British Insultation Scheme to enable greater uptake, reducing bills permanently.
2. A commitment to introduce targeted energy bill support through a social tariff that would provide a long-term price which is a unit rate discount support to protect those on fixed and low incomes that are least able to regularly engage to manage ongoing global price volatility. The Warm Home Discount scheme could also be updated.
3. Create a central database of vulnerable households using government data, building on plans for a cross-utility Priority Services Register. This database would help suppliers target support such as a social tariff. 

Philippe Commaret, Managing Director of Customers at EDF, said: “Our reliance on globally traded fossil fuels means that prices have unfortunately increased significantly over the past few years. And whilst the Ofgem price cap has reduced over the previous months, our price cap forecasting service predicts that October’s will increase by £146 to an average of £1,714 and increase again in January.

“We have continued offering assistance to those in need, providing debt relief alongside a range of financial support services, and kept our fixed prices as low as possible to help, but with costs rising customers need urgent assistance in both the short and long term.”

EDF has installed over 50% of measures across all suppliers as part of the GBIS scheme, more than any other supplier. However, due to scheme design restrictions, many homes that could benefit from support, are either not eligible or not economically viable.

Philippe Commaret continued: “We are supportive of the Great British Insulation Scheme and its objectives to help customers insulate their homes. However, GBIS needs improvements to enable suppliers to extend the benefits to more customers so they can update their homes’ energy efficiency.”

EDF has put forward several recommendations to government which include: 

• Allowing the installation of more than one measure: Currently only one measure per home is allowed. Allowing multiple measures in homes that require them would help customers lower customers energy bills and carbon footprint, as well as reducing the costs of delivering the scheme. 
• Including heating control measures e.g. room thermostats, as a secondary measure for all customer groups: Heating controls are cost effective to install and can bring a big benefit on bill and usage reduction for households.  
• Extending the scheme eligibility to include Council Tax Band E homes in England, which would bring in scope an additional 2.4 million homes – representing an extra 10% of all homes in England. Currently the eligibility criteria is Council Tax Bands A-D. This could open up much needed support to customers, including those on low incomes, struggling with the cost of heating a larger home.

The supplier has consistently offered among the cheapest tariffs of the large suppliers during 2024, with EDF’s Ensure product providing customers peace of mind, by staying £50 under the price cap. That reduction comes off the standing charge rather than the unit cost, meaning that those who sign-up will see the same financial benefit, even if they are low energy consumers or on a Pay As You Go meter.

Customers who are struggling with debt can go to edfenergy.com/billadvice for more information and support.

Notes
Table showing the increase in debt of CC customers: