UK household energy debt and arrears: A £4.79 billion debt operating model challenge
Traditional contact strategies are not resolving the problem. A different operating model is required, one that identifies vulnerability earlier, distinguishes "can’t pay" from "won’t pay" and improves recovery outcomes without compromising customer outcomes.
The arrears profile has changed. The operating model has not.
The value of arrears without a repayment arrangement is now around three times the value of managed debt. Can’t pay and won’t pay are not the same customer. Treating them the same creates avoidable contact, weakens recovery and increases the risk of poor customer outcomes.
Debt indicators: Why the collections model is not keeping pace
The number of accounts in arrears has remained relatively stable, but the value continues to rise. Average arrears without a repayment arrangement have reached £1,876 for electricity and £1,623 for gas in Q1 2026 (Ofgem). This is not simply a collections volume problem. It is an operating-model problem: by the time the balance tells the full story, the opportunity for earlier intervention may already have passed.
No plan in place
2m+ electricity and gas accounts are in arrears without a repayment arrangement.
Debt is getting deeper
Average arrears without a plan: £1,876 electricity and £1,623 gas.
Two very different customers
Can’t pay and won’t pay need different treatment strategies.
More calls, less recovery
More contact without better insight does not guarantee better recovery.
Collect with care: A first-party model for UK utilities
A fully integrated first-party collections model, delivered for your brand and designed to turn behavioural data and frontline vulnerability signals into the right next action.
Personalised solutions. Real recovery
Match the contact, offer and repayment route to the customer’s circumstances. Affordability-led plans are designed to resolve the debt, not simply close the call.
Audit-ready by design
Fair treatment is built into the workflow. Affordability, vulnerability, escalation and customer outcomes are captured as part of the decision, creating an evidence trail from the start rather than reconstructing one after a complaint.
Connected journey. Fewer handoffs
Connect early arrears, affordability, repayment planning, vulnerability support and governance within the core customer journey, with clear escalation when specialist recovery is required.
AI-enabled. Human-led.
AI and behavioural insight give advisers better context before and during the interaction. Human judgement remains at the centre, helping advisers recognise changing circumstances, distinguish can’t pay from won’t pay and choose the right route to resolution. Digital self-service gives customers a path to resolution on their own terms.
50%
Increase in overall collections performance
35%
More cash collected per call
+70 NPS
Customer satisfaction achieved
92%
Customers self-serve when given the option
75%
Reduction in cost to collect
7x
Less likely to generate a complaint
What happens when the operation acts on the signal
Low engagement is not always a question of customer willingness. The timing, channel, offer and quality of the conversation matter.
When frontline signals shape the next action, collections becomes more targeted, more sustainable and easier to evidence.
- Vulnerability is identified earlier, not only after the account escalates
- Can’t pay and won’t pay receive different treatment strategies
- Repayment plans are shaped by affordability, not call closure
- Frontline judgement is supported by data, guidance and clear escalation
- Fair treatment is evidenced as part of the workflow, not reconstructed afterwards
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%
- Customer satisfaction reached +70 NPS
- PSR complaints fell by 50%
The best collections operations in UK utilities are not chasing debt. They are rebuilding trust.
Turn earlier insight into stronger recovery
Book a 30-minute conversation with our Energy and Utilities team to explore how earlier vulnerability identification, better can’t-pay versus won’t-pay decisions and affordability-led collections can improve recovery while protecting customer outcomes.