UK household energy debt: A £4.43 billion debt resolution challenge
The contact is failing them. A different operating model is required. One that segments by risk profile, identifies vulnerability earlier, and improves recovery outcomes.
The arrears profile has changed. The operating model has not
One in four UK households is in arrears. Most have no repayment plan. Cannot pay and will not pay are not the same customer. Treating them the same drives customers deeper into debt and collections models toward conduct risk and regulatory attention.
Debt indicators: Why the collections model is not keeping pace
The number of households in energy debt has not risen sharply. The debt has. The same customers are going deeper, with average electricity arrears now standing at £1,600, more than three times what they were a decade ago. Unresolved debt doesn't leave the system. It re-enters it. The data points to an operating model problem, not a collections volume problem.
No plan in place
Over one million households in energy arrears have no repayment arrangement. The debt is deepening, not spreading.
Arrears have tripled
Average electricity debt has risen from £500 to £1,600 in a decade. These customers are not new to collections contact.
Two very different customers
Cannot pay and will not pay carry different risk profiles. One treatment strategy for both is where recovery fails.
More calls, less recovery
Increasing contact intensity raises cost to collect and reduces the likelihood of a repayment plan the customer can sustain.
Collect with care: A first-party model for UK utilities
A fully integrated first-party debt resolution model, delivered for your brand and built around behavioural insight and vulnerability intelligence.
Personalised solutions. Real recovery
Customers engaged through the right channel with the right offer pay more consistently and sustain plans for longer.
Audit-ready by design
Consumer Duty compliance is embedded into every adviser workflow. Documented escalation routes and defensible outcomes are built in from the start, not added after a complaint.
Full-cycle. No handoffs
From early arrears through structured recovery, governance, reporting, and performance controls scale to your operation without scaling your headcount.
AI-enabled. Human-led.
Powered by iLeverage, Firstsource's proprietary collections platform, behaviour-led segmentation and real-time vulnerability signals give advisers the right context before the conversation starts. Digital self-serve tools give customers a path to resolution on their own terms.
50%
Increase in collections performance
35%
More cash collected per call
+70 NPS
Achieved alongside a 50% increase in collections
92%
Customers self-serve when given the option
75%
Reduction in cost to collect
7x
Less likely to generate a complaint
What an empathetic collections model delivers
Low engagement rates are frequently a function of contact strategy, not customer willingness. Earlier intervention, the right channel, and a conversation built around their actual situation changed the outcome.
- Earlier contact means fewer accounts reaching default
- Cannot pay and will not pay receive different treatment strategies
- Repayment plans structured around affordability and not call closure
- Complaint volumes fall. So does the conduct risk that follows them
- Consumer duty obligations are met at every interaction and not evidenced retrospectively
From £117 to £159 per call: What changed when collections was done right
A UK electricity and gas supplier consolidated their arrears team into a single customer service operation. Advisers were trained to assess affordability, screen for vulnerability, and adapt their approach based on whether a customer could not pay or would not pay.
- Average cash collected per call rose from £117 to £159
- Overall collections performance improved by 50%
- NPS score improved to +70
The best collections operations in UK utilities are not chasing debt. They are rebuilding trust.
See what a different collections model delivers
Book a 30-minute session with our UK utilities collections team and see what empathetic collections looks like in practice.