Stonehaven and E.ON Next propose a household score to reduce and prevent mounting energy debts

Affordability remains a top concern for energy customers. Energy regulator Ofgem announced a 6.4% rise in the energy price cap earlier this week, and their latest statistics show the total value of domestic customer debt and arrears is in excess of £3.8bn (as at Q3 2024)*.

The ‘Rebuilding Trust’ report found that the energy market has not fully recovered since the 2022 energy crisis, and outlines that this has put more consumers into debt, with the Government announcing extra support on energy bills for nearly 3 million households on Tuesday following the price cap rise.

To address the sheer scale of the debt challenge the UK faces, the report makes a number of recommendations to help the Government deliver on the following areas:

1. Improving data 

Taking a new approach to identifying financially vulnerable households who could be eligible for better targeted support.  This  would be more flexible and use a wider set of data sources held by Government to assign a ‘safeguard score’ to each household. By specifying why and how each household may be vulnerable, this system would ensure the right people receive the right support at the right time.

2. Utilising new tools and investment 

Using the safeguard score to unlock access to new tools to help customers better manage their energy consumption including through the installation of green technologies, as well as targeting support more effectively to reduce debt and prevent debt from recurring.

3. Overcoming the energy crisis 

Finding a final resolution to the exponential growth of energy debt over the last few years caused by the 2022 energy crises by using the safeguard scoring system to devise a fair debt relief scheme - ensuring that vulnerable customers have the protections they need, while allowing provision for the recovery of debt from those who have the means to do so.

Ramona Vlasiu, Chief Operating Officer at E.ON Next, said: “It is vital that we find a way to help those who need it most. It is equally important that those with the means to settle their bills are doing so.  But the complexity of affordability isn’t a short-term issue. We must look at the whole system and make improvements to make energy affordable on an enduring basis.

“We are eager to trial innovative solutions to transform people’s relationship with energy, such as our fully funded battery installation pilot in Coventry. Under this initiative, we are installing batteries into the homes of vulnerable customers to help them sustainably reduce their energy use and bills.

“While E.ON Next continues to focus on helping customers and engaging with Government, consumer groups and the regulator on the big issues, including affordability, our ‘Rebuilding Trust’ report recommends bold and innovative solutions, which would go a long way to making the lasting change that’s needed.”

Director of Policy at Stonehaven, Adam Bell, had the following to say on the release of the report:

“The Government does not have the tools it needs to make the energy system work for the most vulnerable. We saw this over the debate on Winter Fuel Payments last year. To better target debt relief for those caught up in the energy crisis, and to ensure any future schemes are fair, we need to build this digital infrastructure now.”

The ‘Rebuilding Trust’ report can be downloaded here.