When energy prices shot up in 2022 and 2023, millions of households fell behind on their bills. For many, that debt is still hanging over them years later.
In this week’s Budget, the government confirmed a one-off energy debt write-off aimed at people who are on benefits or are pensioners and still carrying debt from the crisis. It isn’t open yet, and some details are still being worked out, but here’s what we know about who it’s for and what to do now.
Who it’s for
According to the government’s Budget guidance on energy bills, the person who pays the energy bill must:
- be on means-tested benefits (such as Universal Credit or Pension Credit), or
- be on disability benefits, or
- be a pensioner
and have built up energy debt during the 2022 to 2024 energy crisis.
What it does
It’s a one-off, targeted write-off of some or all of that crisis-era debt. It’s not a cash payment, and it doesn’t cover new debt built up since then.
There is a condition. You’ll need to re-engage with paying: for example, by agreeing an affordable plan for your ongoing bills, or working with a free debt advice charity if you can’t pay yet.
How it builds on earlier plans
This isn’t completely new. In October 2025, the energy regulator Ofgem set out plans for a Debt Relief Scheme that could wipe up to £500 million of energy debt for around 195,000 households on means-tested benefits who owed more than £100 from April 2022 to March 2024. Under that plan, suppliers would identify eligible customers automatically and contact them.
The Budget wording suggests the scheme may now reach further, including people on disability benefits and pensioners. Ofgem will consult on the final design, so the exact rules and amounts could still change.
When will it happen?
No start date has been set. The government says Ofgem will consult on the final design and give an update “as soon as possible.” If it follows Ofgem’s earlier plan, eligible customers should be contacted by their supplier, so you may not need to apply.
What to do now
- Don’t stop talking to your supplier. The scheme is tied to re-engaging with your debt, so keeping in touch now can only help.
- Ask for an affordable repayment plan based on what you can actually pay. Suppliers must consider your circumstances.
- Check you’re getting all your benefits. Being on a means-tested benefit like Pension Credit or Universal Credit may be the key to qualifying, and many people who are eligible don’t claim.
- Get free debt advice from StepChange, National Debtline or Citizens Advice. They can also help you deal with your supplier.
- Look at supplier hardship funds. Many energy companies have their own grant schemes for customers in debt.
Other help this winter
- the £100 Household Energy Payment for council tax bands A to D in England, from January 2027
- the Warm Home Discount, £150 off your electricity bill if you’re on certain benefits
- the Winter Fuel Payment for pensioners, up to £300
- Cold Weather Payments, £25 for each freezing week if you’re on certain benefits
A warning about scams
No one should ask you for a fee to “clear your energy debt.” The government scheme is free. Only deal with your own energy supplier, or a free, regulated debt charity.
Sources: GOV.UK, What the Autumn Budget 2026 means for your energy bills, Ofgem (October 30, 2025) and MoneyWeek.
Maria is a dedicated news writer covering the latest UK updates on DWP, PIP, State Pension Triple Lock, Child Benefit, Universal Credit, and driving licence regulations. She focuses on explaining government announcements, benefit eligibility, payment changes, pension increases, and new regulations in a clear and easy-to-understand way.