Blog
Winter Preparedness - Is it time for a Debt Health Check?
Given the £bn increases in unsecured debt and Direct Debit failures over the past year, suppliers have an opportunity to re-assess how they're set up to deliver customer outcomes. Leveraging this understanding is key to take control in such a challenging macro environment - see how improvements can be brought to life in this blog.
Watch: Why bad debt is an emerging concern
Falling energy prices are welcome news, but there's an emerging concern for suppliers, surrounding their approach to forecasting bad debt as market conditions change. In this video, Rachel Littlewood shares lessons from the front line to help you recognise potential cashflow challenges.
Direct debit failures have reached an all-time high
Following on from last week’s look at the latest Ofgem debt figures, I wanted to dive deeper into the worrying number of £2.3bn of unsecured debt, up from £1.3bn a year ago.
Energy debt reaches another all-time high
Ofgem has now published their Q4 view of domestic debt in the energy industry and once again it makes for concerning reading. The material increase in the levels of unsecured debt to £2.3bn is a real worry and while falling prices are a welcome trend, suppliers need to get back in control by focussing on the factors that will reduce long term harm.
Collections in Water – Exceeding Ofwat’s expected outcomes
Water customers have seen their cost-of-living challenges amplified throughout Q1-24. It’s a concerning narrative largely driven by April’s expected bill increase, stats showing more customers are unable to pay, and most recently, the joint debt collection statement shared by the UK Regulators’ Network (UKRN) – in which Ofwat is prominent.
Supporting customers in crisis – Reflections from StepChange
Customer care, through advice and debt sale, was the key theme when hosting our recent session with Vanessa Northam – Head of Charity Development at StepChange Debt Charity.
Pre-payment debt has increased 100% to £1bn since Q4-21
Over the past two years we’ve seen pre-payment meter (PPM) debts continuing to rise, and as of Q3-2023 they now stand at £1bn The amount of customers using their PPM to repay a debt has risen by 40% (up 220k to 750k), and the average debt balances have also risen by 40% (up £400 to £1,300) - resulting in a 100% (up £500m to £1bn) increase in total pre-payment meter debt.
Early-life collections – How to optimise your approach
As the demand for debt advice continues to break records (PayPlan, 2024), the pressure is mounting on Financial Services organisations to provide holistic, proactive support for those in difficulty.
Using machine learning to predict and prevent customer delinquency
During a recent engagement with a large Energy retailer, we helped their Debt team to apply machine learning analysis within the customer base, identifying trends to predict (and later prevent) delinquency. With a new insight into which customers may face financial difficulty, the supplier was able to implement pre-emptive support, through improved segmentation and tailored customer journeys.
Total Ofgem reported debt is now at ~£3bn for Q3-2023
Total Ofgem reported debt is now at ~£3bn for Q3-2023, 50% (~£1bn) higher than Q3-2022. The primary driver is an £800m increase from accounts without No Arrangement in place to repay their debt.
Difficult Conversations – Equipping collections agents for optimal support
With Christmas on the horizon, consumer spending is set to face its usual seasonal increase, adding extra pressure to critical areas like credit card payments and energy bills. Inevitably, some consumers will find themselves in financial difficulty over the coming months, leading to more collections conversations with their service provider.
Most customers worse off due to Jan 2024 Energy Price Cap
OFGEM have released their updated Energy Price Cap figures for Q1-24, and our modelling predicts this will make most customers worse off compared to Q1-23.
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