Energy arrears: what happens, and what you can actually do
Energy is a priority debt, but disconnection is far rarer than most people fear and suppliers have real obligations before it. Here is the escalation process in order, what your rights are, and how this debt is treated in each UK debt solution.
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Where this debt sits in the hierarchy
The consequence of not paying is losing something essential — your home, your supply, your goods, or in rare cases your liberty. Priority debts come before credit cards, loans, overdrafts and catalogues, however aggressive the letters from those creditors are.
What actually happens, in order
Arrears build
The supplier should contact you and offer a repayment plan based on what you can afford.
Repayment plan
This can include payments through your regular bill or through a prepayment meter.
Prepayment meter
A supplier must follow the Ofgem process, including attempted contact, an assessment of vulnerability, and a site welfare visit before installing one involuntarily.
Fuel Direct
If you receive certain benefits, arrears can be deducted directly from your payments at a fixed weekly rate.
Disconnection
A last resort requiring a warrant, and prohibited for certain vulnerable households.
What people are not usually told
Do three things. Get on the Priority Services Register — it is free, it takes minutes, and it gives you protections including advance notice of interruptions and additional support. Ask your supplier what hardship funds it operates; several of the large suppliers run schemes that clear part or all of a customer's arrears. And check your entitlement to the Warm Home Discount and any local authority household support fund, which is separate money and is frequently unclaimed.
How this debt is treated in each solution
Every formal solution handles debts differently, and this one is no exception.
| IVA | DMP | DRO | Bankruptcy | |
|---|---|---|---|---|
| Formal insolvency | Yes | No | Yes | Yes |
| Where it applies | England, Wales and Northern Ireland | The whole of the UK | England and Wales (Northern Ireland has its own version with different thresholds) | England, Wales and Northern Ireland (Scotland calls it sequestration) |
| Typical duration | 60 months, or 72 with home equity | Until the debt is repaid — no fixed end | 12 months | Discharged in 12 months; payments up to 3 years |
| Monthly payments | Monthly, affordability-based | Monthly, flexible, changeable | No payments at all | Only if you have surplus income |
| Your home | Excluded; equity sets the term | Not affected | Not available to homeowners | May be sold |
| Credit file impact | 6 years from the start date | Defaults recorded, 6 years each | 6 years from the order date | 6 years from the order |
| Public register | Listed on the public Individual Insolvency Register, which anyone can search. Your address can be withheld only on evidenced safety grounds. | Nothing public. A DMP is a private arrangement. | Listed on the public Individual Insolvency Register. | Listed on the public Individual Insolvency Register, and in some cases advertised more widely. |
| Fees | Paid from your monthly payments | Free providers available | Free — no application fee | £680 application fee |
| Creditor protection | Legally binding on included creditors | None — entirely voluntary | Full protection, then write-off | Full protection, then discharge |
Arrears existing at the start date can usually be included in a formal solution. Ongoing liabilities — this year's council tax, current rent, current energy usage — cannot be, and must be budgeted for separately.
Not sure which of these applies to you?
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Common questions
Can my energy be cut off in winter?
Suppliers signed up to the industry commitment do not knowingly disconnect vulnerable customers between 1 October and 31 March, and there are additional protections for households with children under five, pensioners and people with certain disabilities or medical needs. Being on the Priority Services Register is what makes those protections work, so register even if you think you are managing.
Do energy arrears go into an IVA?
Arrears at the start date can usually be included, though the supplier may require a prepayment meter for ongoing supply. Ongoing usage is not included and must be paid. Discuss this with the practitioner before the proposal goes to creditors so it is built into your budget.
Related guides
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