Gas and Electric Arrears: Your Rights on Repayment Plans

When a domestic energy customer in Great Britain falls behind on gas or electricity payments, a set of rules governs what happens next. These rules are established primarily through Ofgem Standard Licence Conditions — binding requirements placed on all licensed energy suppliers — and through primary legislation including the Gas Act 1986 and the Electricity Act 1989.

This article explains how the repayment plan system works, what protections exist for customers in energy debt, and what processes suppliers must follow before taking enforcement action. It covers repayment plan entitlements, the back-billing limitation, involuntary prepayment meter rules, the Fuel Direct scheme, the warrant process, and the forthcoming Debt Relief Scheme.

This article applies to domestic customers in Great Britain (England, Wales, and Scotland). Northern Ireland has separate arrangements for some of these matters. Nothing in this article constitutes financial advice.

Energy suppliers in Great Britain are required, under Ofgem Standard Licence Condition 27.8, to work with domestic customers to agree repayment plans for energy debt that the customer can afford. This obligation applies to both standard credit meter and prepayment meter customers. The supplier must take into account income, outgoings, existing debts, and personal circumstances when setting repayment amounts.

If a supplier has failed to bill a customer correctly, the supplier cannot charge for energy used more than 12 months ago where the billing delay was the supplier's fault. This is established under Standard Licence Condition 21BA.

A supplier cannot install a prepayment meter against a customer's wishes without meeting a series of strict requirements, including making at least 10 contact attempts and carrying out a site welfare visit. Certain households are absolutely prohibited from having an involuntary prepayment meter installed.

The framework protecting energy customers in debt operates across several layers: primary legislation, regulatory licence conditions, and Ofgem guidance.

Primary legislation gives suppliers certain powers. Under Schedule 2B to the Gas Act 1986 (paragraphs 7(3)(a) and 23(2)(c)), gas suppliers may apply for warrants to enter premises and install prepayment meters for debt recovery. Under Schedule 6 to the Electricity Act 1989 (paragraphs 2(1), 7(4), and 8(3)), electricity suppliers have equivalent powers. Warrants are granted by magistrates in England and Wales, or by a Justice of the Peace in Scotland.

Ofgem Standard Licence Conditions impose detailed obligations on how suppliers must treat customers before, during, and after any debt recovery process.

• SLC 27.8 requires suppliers to agree affordable repayment plans.
• SLC 27.8A, introduced in October 2020, sets out specific principles suppliers must follow when assessing a customer's ability to pay, including rules on setting repayment rates, default amounts, upfront payments, and re-engagement after failed arrangements.
• SLC 28.7 governs when and how involuntary prepayment meters may be installed.
• SLC 21BA establishes the 12-month back-billing limitation.

Ofgem holds statutory powers to amend these licence conditions under the Gas Act 1986 and the Electricity Act 1989, and has used these powers to introduce prepayment meter protections and the Debt Relief Scheme.

Ability to pay assessment. When a customer contacts their supplier about energy debt, the supplier must assess the customer's ability to pay. This assessment must consider income, outgoings, existing debts, and personal circumstances. The supplier must also estimate the customer's future energy usage. In most cases, customers can request a review of their payments, request payment breaks or reductions, or ask for more time to pay.

The 12-Month Back-Billing Rule

Under SLC 21BA, suppliers cannot charge domestic customers (or microbusinesses) for energy used more than 12 months ago if the supplier is at fault for the billing delay. This protection does not apply if the customer acted unreasonably — for example, by blocking meter access, stealing energy, or ignoring payment requests. In such cases, the supplier may rely on an unreasonable-behaviour exception to charge beyond the 12-month limit.

According to published guidance, where a customer has gone without a bill for an extended period, the customer can request to repay the resulting debt over the same length of time as the period over which the debt built up. If this arrangement remains unaffordable, the customer can request a longer repayment period. It should be noted that while this principle is widely cited by advisory bodies, the specific requirement to mirror repayment duration to the unbilled period does not appear to be explicitly stated in primary Ofgem licence conditions; SLC 27.8 requires "reasonable" repayment arrangements based on ability to pay.

Involuntary Prepayment Meter Installation

Before a supplier can consider installing a prepayment meter without the customer's consent, several conditions must be met under SLC 28.7 and associated Ofgem guidance. Charges must have been outstanding for three or more months after the bill was issued, and the outstanding charges must be £200 or more per fuel, as set out in Ofgem's guidance issued under SLC 28.4. The installation must not be carried out where the customer is on, or transitioning to, a repayment plan. It should be noted that the specific monetary threshold is set in Ofgem guidance rather than in the licence condition itself and may be subject to change.

The supplier must make at least 10 attempts to contact the customer before installation. The supplier must also carry out a site welfare visit before installation to identify any vulnerabilities in the household. Under Ofgem's prepayment meter protections, the lead representative must wear audio or body cameras during welfare visits and warrant installations, and footage must be available for audit.

Consent for prepayment meter installation must be unmistakably given — whether in writing or verbally — must be recorded, and must not be implied or given under pressure. Without genuine consent, the supplier must obtain a warrant or rely on the debt trigger provisions of SLC 28.7.

Prohibited Categories for Involuntary Prepayment Meters

Under SLC 28.7, as modified in September 2023 and extended in November 2023, certain households are subject to an absolute prohibition on involuntary prepayment meter installation. These are households:

• Where a continuous energy supply is needed for medical equipment.
• Where all occupants are aged 75 or over with no support.
• Where children under the age of 2 are present.
• Where there are severe health issues or terminal illness.
• Where no person in the household is able to top up the meter due to physical or mental incapacity.

The age threshold was extended from 85 and over to 75 and over in November 2023, as a mandatory licence condition effective 8 November 2023.

Emergency Credit on Involuntary Installation

When a prepayment meter is installed under warrant or switched remotely without the customer's consent, the supplier must provide £30 of short-term credit per meter. This credit exists to prevent the household from immediately going off supply. An equivalent non-disconnection period may be offered as an alternative.

Warrant Costs

Under SLC 28B.3, as modified in 2023, the maximum total charges a supplier can recover from a domestic customer for costs associated with warrants is £150 within any 12-month period. This applies per premises. The £150 figure is defined as the "Specified Amount" and can only be changed to a higher amount by Ofgem following consultation.

The Warrant Process

When a supplier applies for a warrant to enter premises, the application is made to magistrates in England and Wales or to a Justice of the Peace Court in Scotland. Scotland has separate forms and procedures (CAT DD forms) under the Scottish Courts National Utility Warrant Guidance (July 2024). The underlying powers for entry and prepayment meter installation derive from Schedule 2B to the Gas Act 1986 and Schedule 6 to the Electricity Act 1989, with the warrant practice also commonly described as operating under the Rights of Entry (Gas and Electricity Boards) Act 1954. According to consumer guidance, suppliers typically have 28 days from the date a warrant is granted to use it. The supplier must provide evidence of the debt, contact attempts, and welfare assessment as part of the application.

Fuel Direct (Third-Party Deductions from Benefits)

Customers receiving certain means-tested benefits can have energy debt repayments deducted directly from their benefits at source. This scheme, sometimes called Fuel Direct or Third Party Deductions, is available to recipients of Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Pension Credit, and Universal Credit.

For Universal Credit claimants, third-party deductions for fuel arrears are usually up to 5% of the Universal Credit standard allowance. The DWP can approve higher "last resort" deductions in some cases, for example to prevent disconnection.

A maximum of three third-party arrears deductions can run at any one time. Legislation allows overall UC deductions of up to 40%, but current policy caps total deductions at 25% of the standard allowance.

Debt Relief Scheme

Ofgem has proposed a Debt Relief Scheme, with Phase 1 expected to launch in early 2026, subject to the necessary approvals and implementation steps. The proposed scheme could write off up to approximately £500 million in total for an estimated 195,000 to 200,000 customers, though actual figures will depend on take-up. Not all customers with energy debt will be eligible; Phase 1 engagement criteria include receipt of means-tested benefits, with identification via DWP data matching. Customers not identified through data matching may undergo ability-to-pay assessments in a proposed Phase 2.

"Can my supplier just install a prepayment meter without telling me?"

No. Suppliers must make at least 10 attempts to contact the customer and carry out a site welfare visit before any involuntary installation. If the customer has not consented, the supplier must either rely on the debt trigger provisions of SLC 28.7 (where all conditions are met) or obtain a warrant.

"Does the 12-month back-billing rule mean I never have to pay for old energy?"

The rule prevents suppliers from charging for energy used more than 12 months ago where the billing delay was the supplier's fault. It does not apply where the customer acted unreasonably — for instance, by blocking meter access or ignoring payment requests. It applies to domestic customers and microbusinesses in Great Britain.

"Do I have to accept whatever repayment amount my supplier proposes?"

Suppliers are required under SLC 27.8 and SLC 27.8A to set repayment rates based on what the customer can afford, taking into account income, outgoings, debts, and personal circumstances. The obligation is on the supplier to make the arrangement affordable, not simply to impose a figure.

"Is Fuel Direct the same as having my energy bills paid by the government?"

No. Fuel Direct is a mechanism for deducting energy debt repayments directly from certain benefits. The deductions reduce the customer's benefit payment; they do not represent additional financial support.

"Will the Debt Relief Scheme wipe all my energy debt?"

The scheme is not yet operational. Its proposed Phase 1 targets customers who accrued debt during a specific energy crisis period and who meet eligibility criteria, including receipt of means-tested benefits. Not all customers with energy debt will qualify.

• Scotland. While the substantive protections under Ofgem licence conditions apply across Great Britain, the warrant process differs in Scotland. Applications are made to Justice of the Peace Courts rather than to magistrates, and separate forms and procedures apply under Scottish Courts National Utility Warrant Guidance (July 2024).
• Unreasonable customer behaviour. The 12-month back-billing protection under SLC 21BA does not apply where the customer has acted unreasonably. Examples include blocking meter access, failing to cooperate with meter readings, ignoring payment requests, or stealing energy. In such cases, the supplier may rely on an unreasonable-behaviour exception to charge beyond the 12-month limit.
• Microbusinesses. Microbusinesses — generally defined as consuming less than 100,000 kWh of electricity per year or less than 293,000 kWh of gas per year, or having fewer than 10 employees with a turnover below €2 million — benefit from the 12-month back-billing protection. However, according to published guidance, microbusinesses may not have the same repayment plan protections as domestic customers under SLC 27.8. This may vary depending on the specific circumstances and the supplier's licence obligations.
• Consent for prepayment meters. Consent must be unmistakably given, whether written or verbal, and must be recorded. It cannot be implied or given under pressure. Without genuine consent, a supplier cannot install a prepayment meter unless the debt trigger conditions are met and all SLC 28.7 requirements are satisfied, or unless a warrant has been obtained.
• Debt Relief Scheme exclusions. Not all customers with energy debt will be eligible for the Debt Relief Scheme. Phase 1 requires receipt of means-tested benefits, and eligibility is determined through DWP data matching. Customers not identified through this process may be assessed through ability-to-pay assessments in a proposed Phase 2.

A domestic customer in Great Britain who falls into energy debt is not without protection. The regulatory framework requires their supplier to engage with them, assess what they can realistically afford, and agree a repayment plan on that basis. The supplier cannot simply impose a repayment amount without considering the customer's circumstances.

Before a supplier can take enforcement action — such as installing a prepayment meter without consent or applying for a warrant — it must have followed a defined process, including multiple contact attempts and a welfare visit. Certain households are entirely protected from involuntary prepayment meter installation.

Where the supplier has been responsible for a billing delay, the customer has the protection of the 12-month back-billing rule, which limits the period for which the supplier can charge.

For customers receiving certain means-tested benefits, the Fuel Direct scheme provides a structured route for repaying energy debt through deductions at source, subject to defined limits.

The costs a supplier can pass on to the customer for the warrant process are capped at £150 per premises within a 12-month period. Where a prepayment meter is installed involuntarily, the supplier must provide £30 of credit per meter to prevent immediate loss of supply.

• Affordable Plans: Suppliers MUST agree repayment plans based on what you can afford (SLC 27.8).
• Back-Billing: Suppliers cannot charge for energy used >12 months ago if the delay was their fault.
• Involuntary PPMs: Strict rules apply (10 contact attempts, welfare visit). Prohibited for certain vulnerable groups.
• Cost Caps: Warrant costs are capped at £150/year. Suppliers must provide £30 credit on forced install.
• Fuel Direct: Benefits claimants can have debt deducted directly from benefits (capped amounts).
• Debt Relief: A new scheme is proposed for 2026 for eligible customers.