Energy debt write-off in the UK is rarely automatic. Ofgem's licence conditions require suppliers to offer affordable repayment plans and prohibit them from billing for energy used more than 12 months ago in specific fault scenarios (the back-billing rule under SLC 21BA), but a full write-off is usually channeled through supplier-administered hardship funds rather than the regulator itself. Citizens Advice complaint figures for Q4 2025 logged energy debt and disconnection threats as the second-largest complaint category.
Last reviewed: May 2026
TL;DR
- SLC 21BA (back-billing rule) bars suppliers from charging for energy used more than 12 months ago in supplier-fault cases.
- Affordable repayment plans are mandatory under SLC 27 where the customer requests them; the plan must reflect ability to pay.
- Supplier hardship funds: British Gas Energy Trust, Octo Assist Fund, EDF Customer Support Fund, OVO Energy Fund (Charis Grants), plus the Scottish Power Hardship Fund.
- Disconnection of essential domestic supply is rare in practice; suppliers must follow the Energy UK Vulnerability Commitment and SLC 27 before any disconnection.
- Energy Ombudsman 2025 annual report shows around 80,000 cases accepted, with debt and billing the largest individual category.
The back-billing rule (SLC 21BA): when the supplier cannot charge
SLC 21BA in Ofgem's Standard Licence Conditions is the closest thing in UK energy regulation to an automatic write-off rule. It bars a supplier from charging for unbilled energy used more than 12 months previously where the supplier was at fault and the customer was not on a Pay As You Go meter and did not have access to a working smart meter showing the issue.
The rule's mechanics:
- The unbilled period must exceed 12 months from the date the supplier first sought to bill it.
- The supplier must have been at fault (failed to send accurate bills, failed to register the meter correctly, failed to respond to the customer's meter readings).
- The customer must not be on PAYG (PAYG already prepays for usage so back-billing in the regulatory sense does not arise).
- The customer must not have access to a working smart meter that was displaying current consumption and current cost.
Where all four conditions hold, the supplier must write off the unbilled balance for any period over 12 months. The figure can be material: in 2024 Citizens Advice published case studies of households with back-bill calculations over £5,000 that fell entirely under SLC 21BA and were written off in full once the complaint reached the Energy Ombudsman.
What "supplier fault" actually means
Fault is interpreted broadly in favour of the customer. Examples that Ofgem's compliance casework has accepted as supplier fault:
- The supplier had wrong meter details on file and billed against a different MPAN.
- The supplier issued estimated bills repeatedly while ignoring customer-submitted readings.
- The supplier's billing system failed to send any bill for over 12 months despite the customer being in the system.
- A change of tenancy was not processed correctly and the supplier billed the wrong party.
- The smart meter stopped sending half-hourly data and the supplier did not investigate.
The catch is the customer-fault carve-out. If the customer ignored bills, failed to update the supplier on a change of address, or actively obstructed access to the meter for safety inspection, SLC 21BA does not apply. Ofgem's compliance team takes a balanced view on each case.
Affordable repayment plans (SLC 27) and the disconnection threshold
Where the debt is legitimately owed, the supplier must offer an affordable repayment plan reflecting the customer's ability to pay. The plan is structured against the customer's income, essential outgoings, and other priority debts. The supplier cannot insist on a repayment rate that pushes the household below subsistence; doing so would breach SLC 27.
The Energy UK Vulnerability Commitment, adopted by every major domestic supplier, layers additional protections on top: extended forbearance windows for households in vulnerable circumstances, the Priority Services Register (PSR) for medical equipment users and those with cognitive or mobility impairments, and a presumption against disconnection between November and March for households where children, older people, or persons with disabilities live.
Disconnection of an active domestic supply for debt is exceptionally rare in 2026. Ofgem statistics for the last full year report a tiny fraction of debt cases ending in disconnection; the regulatory and reputational risk to suppliers is large enough that almost all cases are resolved through repayment plans, prepayment installation (with customer consent), or write-off through a hardship fund.
Supplier hardship funds: who pays what, and how
Five named funds carry most of the write-off volume across the domestic market. Each is independent of the supplier's commercial operation, administered either in-house with a charitable structure or by a third party (Charis Grants is the most common administrator).
| Fund | Supplier customer? | Maximum write-off | Administrator |
|---|---|---|---|
| British Gas Energy Trust | Open to non-BG customers as well | Up to the full outstanding debt, capped at published limit | British Gas Energy Trust (independent charity) |
| Octo Assist Fund (Octopus) | Octopus customers only | Full debt write-off or substantial reduction in agreed cases | Octopus Energy in-house team |
| EDF Customer Support Fund | EDF customers only | Debt clearance plus appliance or boiler support where eligible | EDF Energy via Charis Grants |
| OVO Energy Fund | OVO customers only | Debt reduction up to a published cap | Charis Grants on behalf of OVO |
| Scottish Power Hardship Fund | Scottish Power customers only | Debt write-off up to a published cap, plus appliance grants | Charis Grants on behalf of Scottish Power |
| E.ON Next Energy Fund | E.ON Next customers only | Debt reduction or write-off | Charis Grants on behalf of E.ON Next |
Each fund has its own application form, evidence requirements (income and outgoings statement, benefit awards letters, debt schedule), and decision timeline. Decisions typically run 4 to 8 weeks from a complete application. The funds are not unlimited; allocations are reset annually and applications late in the financial year sometimes pause if the year's budget is exhausted.
The British Gas Energy Trust: the largest cross-supplier route
The British Gas Energy Trust accepts applications from non-British Gas customers, which is unusual in the supplier hardship fund landscape. Trust grants can clear gas, electricity, or dual-fuel debt with any supplier, subject to the Trust's published criteria (household income thresholds, evidence of vulnerability, exhausted other options).
The Trust runs an income-based assessment: the household must be in financial hardship measured against published thresholds and must have engaged with the supplier's repayment plan process before applying. The Trust's annual report shows several thousand awards per year, with most awards clearing debt balances under £2,500 in full.
On the ground, the Trust is often the only practical route for a customer of a smaller supplier without a dedicated hardship fund. The smaller supplier's customer service team will sometimes signpost the Trust directly.
The role of the Energy Ombudsman
The Energy Ombudsman is the statutory dispute resolution body for domestic and microbusiness energy complaints. Its 2025 annual report logged around 80,000 cases accepted into formal investigation, with debt and billing the largest individual category, followed by transfers and switching, then customer service. Where a supplier refuses a back-billing write-off the customer believes is owed under SLC 21BA, the route is: complain to the supplier first, give the supplier eight weeks to respond, then refer to the Energy Ombudsman with the supplier's deadlock letter or after the eight weeks elapse. The Ombudsman's award can include a financial credit, a goodwill payment, and a formal apology. The Ombudsman cannot order a supplier to write off legitimate debt outside SLC 21BA. What it can do is order a corrected bill, a corrected repayment plan, and goodwill credits where the supplier's handling fell below the required standard. In practice, those credits can be large enough to clear the contested balance.
Devolved-nation routes: Home Heating Support Fund and equivalents
Scotland operates the Home Heating Support Fund alongside the supplier hardship funds. Administered by Advice Direct Scotland under Scottish Government funding, the Fund offers crisis grants for fuel bill arrears to Scottish residents who meet income criteria. It runs in parallel with supplier-specific funds and can stack with them.
Wales operates the Discretionary Assistance Fund's Emergency Assistance Payment route for energy crisis cases. The fund is administered by Welsh Government via Family Fund and pays small crisis grants for prepayment top-ups or arrears clearance.
Northern Ireland's equivalent is the Discretionary Support scheme through the Department for Communities, which can grant or loan fuel bill support to qualifying households. The Energy Ombudsman covers Northern Ireland for gas; the Consumer Council for Northern Ireland (CCNI) handles electricity complaint handling at the front end.
Pre-payment meter forced installation: paused but not gone
The forced installation of prepayment meters under warrant was paused by Ofgem in early 2023 following supplier conduct issues. The pause has been progressively unwound under new licence conditions requiring stricter customer vulnerability checks, site visit recording, and a published code of practice for involuntary PPM installation.
In practice in 2026, involuntary PPM is now extremely tightly controlled. Suppliers must demonstrate they have offered an affordable repayment plan, the customer has refused or failed to engage, the household has no PSR vulnerabilities that would make PPM inappropriate, and a site visit has confirmed the property circumstances. The pre-2023 high-volume warrant model has not returned.
Practical sequence for a customer in arrears
The action steps in order:
- Contact the supplier and state the debt amount, the current ability to pay, and any vulnerabilities (medical, financial, personal).
- Ask explicitly for an income and expenditure assessment and a repayment plan reflecting ability to pay under SLC 27.
- Apply to the supplier's hardship fund or the British Gas Energy Trust where the supplier offers no dedicated fund.
- Apply to the devolved-nation crisis fund (Scotland's Home Heating Support Fund, Wales DAF, NI Discretionary Support) where applicable.
- Where the debt includes any period over 12 months for which the supplier was at fault, formally raise SLC 21BA and demand the corresponding write-off.
- Escalate to the Energy Ombudsman after eight weeks of unresolved supplier handling, attaching the deadlock letter or the chronology of unanswered complaints.
Free debt advice through Citizens Advice, StepChange, or National Debtline can sequence the process and act as advocate. Their leverage with supplier hardship teams is materially higher than a customer alone.
Where write-off rarely happens
Write-off is rare in three case types: short-term debts under 12 months where the supplier was not at fault and the customer can pay over time; business and microbusiness accounts where the consumer protections are narrower; and households that ignore correspondence and never engage with the supplier's hardship process. The hardship funds are explicit that engagement with the process is the prerequisite for an award.
Frequently asked questions
Can a supplier disconnect a domestic supply for unpaid debt?
In theory yes, in practice extremely rarely. Disconnection requires a court warrant, multiple prior attempts at engagement, no vulnerability flags, and a process that takes months. Suppliers prefer affordable repayment plans or prepayment with consent.
Does SLC 21BA apply if the customer holds a working smart meter?
If the smart meter was working and displaying consumption and cost, the customer is presumed to have had visibility of usage, and the back-billing protection does not apply. Where the smart meter dropped to dumb mode and the supplier failed to investigate, the protection can still apply.
How long can a supplier chase historic energy debt?
The standard limitation period for simple contract debt is six years in England and Wales (five in Scotland). Suppliers rarely pursue debt over six years old in court, and the SLC 21BA back-billing rule clears the part of the debt over 12 months where the supplier was at fault.
Are hardship fund awards taxable?
No. The awards are charitable or supplier-funded crisis grants applied directly to the energy account and are not treated as taxable income.
Can a tenant claim a supplier hardship grant where the landlord pays the bill?
Generally not directly, because the named account holder is the eligible party. The tenant can apply through the British Gas Energy Trust where the debt is owed in the tenant's own name and the landlord arrangement is for service-charge-style energy reimbursement.
What happens to the debt if the supplier ceases trading?
The Supplier of Last Resort transfers customer accounts and outstanding debt balances. The replacement supplier honours the existing repayment plan or renegotiates it under their own SLC 27 obligations.