Energy Debt Relief Scheme 2027: Who Could Qualify?

What is the Energy Debt Relief Scheme?

The Debt Relief Scheme, often shortened to DRS, is intended to reduce or write off some historic household energy debt. It is part of a wider government and Ofgem strategy to prevent arrears growing and make repayments more sustainable.

Ofgem says the scheme is aimed at domestic customers in genuine financial need who accumulated debt during the high-price period from 2022 to 2024 and have little realistic prospect of repaying it. It is not a general rebate, a cash payment or an automatic reduction for every customer with an outstanding balance.

The current plan is a single launch in spring 2027. Ofgem is due to consult on the revised design in late 2026 and make a decision in early 2027. Those steps matter: detailed rules from earlier proposals should not be treated as final unless the new consultation and decision retain them.

Who could qualify for energy debt relief?

The government says the scheme will cover eligible billpayers on means-tested benefits or disability benefits, as well as pensioners. They must have built up qualifying debt during the 2022 to 2024 energy crisis and take steps to re-engage with paying for their energy.

Ofgem estimates that up to 2.4 million customers currently have historic debt that could be considered. That is not a forecast that 2.4 million people will receive a write-off. Some may not meet the final financial-need, debt-period or engagement tests, and the amount eventually relieved will depend on the approved rules and customer participation.

Important details are still unconfirmed, including the exact benefit and pensioner definitions, any minimum balance, the dates used to measure eligible debt and how suppliers will identify customers. If a message or social-media post claims that applications are already open, verify it through Ofgem and your supplier before sharing information.

Which energy debt may be included?

The new strategy targets gas and electricity debt associated with the 2022 to 2024 energy crisis. Ofgem says £2.47 billion of arrears was accumulated in that period, but the total eventually written off will depend on eligibility and engagement. Current bills and debt outside the qualifying period may still need to be paid.

Keep historic debt separate from ongoing energy use when checking your account. For example, if a statement shows a £900 carried-forward balance and £80 of new charges, do not assume the whole £980 is one qualifying amount. Ask the supplier for a transaction history showing when the arrears arose, payments received, adjustments made and charges added.

Continue paying what you can afford towards current use and any agreed repayment plan. Stopping payments could increase the balance and is not one of the announced qualifying steps. Ofgem says the final design will strengthen engagement conditions, potentially using affordable supplier repayment plans or smart prepayment where appropriate, while retaining safeguards for vulnerable customers.

• Download bills and annual statements covering 2022 to 2024 if they are still available.
• Save the latest account balance, payment history and any repayment-plan letters.
• Take an up-to-date meter reading and keep a dated photograph if readings are not sent automatically.
• Ask the supplier to explain which part of the balance is usage, standing charges, repayments or an adjustment.

What should you do before the scheme opens?

Contact your energy supplier now if the bill is unaffordable. You do not need to wait for the Debt Relief Scheme. Ofgem says suppliers must work with customers to agree an affordable payment plan and can discuss payment breaks or reductions, more time to pay, access to hardship funds and help with energy-saving measures, depending on circumstances.

Explain your income, essential spending, health or accessibility needs and what you can realistically pay. Ask for the proposed arrangement in writing. If you are on the Priority Services Register or need communication in an accessible format, tell the supplier so that support is recorded.

Free debt advice can help you review all debts rather than dealing with the energy account alone. Ofgem links to MoneyHelper and national advice services. In England and Wales, an adviser can assess whether Breathing Space is suitable; Scotland has a debt moratorium. These protections are separate from the DRS.

How to check the balance against your electricity use

A monthly Direct Debit, an account balance and the cost of electricity used are three different figures. To estimate current electricity charges, subtract an earlier actual meter reading from a later one, multiply the kWh used by your unit rate, then add the daily standing charge for the number of billing days.

Compare that estimate with the usage lines on the bill, not just the Direct Debit or total balance. A difference can come from estimated readings, a tariff change, old debt, a repayment amount, gas charges or an account adjustment. The calculator can help check the arithmetic, but only the supplier can provide the full account ledger and decide how payments were allocated.

If the supplier cannot explain the balance or correct a billing error, make a formal complaint and keep the reference. The planned scheme does not replace the normal complaints process and should not be used to leave an inaccurate bill unchallenged.

Does the scheme include Northern Ireland?

No equivalent Northern Ireland Debt Relief Scheme has been confirmed in these announcements. Ofgem regulates the retail energy market in Great Britain, while Northern Ireland has a separate market and regulator. Do not assume that Great Britain eligibility or dates apply to a Northern Ireland electricity account.

Northern Ireland customers who are struggling should contact their supplier promptly. The Consumer Council says suppliers can discuss a manageable repayment plan based on ability to pay and points households to free energy, benefits and debt advice. Keep statements and meter evidence in the same way, but follow Northern Ireland guidance rather than an Ofgem application claim.