Customer Debt Insights
INSIGHTS
Managing unprecedented debt in Energy & Utilities
Customer debt in the energy and utilities sector has reached unprecedented levels, intensifying pressure on both households and suppliers. While Ofgem and Ofwat continue to seek ways to ensure effective support for those in need, balancing fair customer treatment with strong financial performance remains a critical challenge.
At BFY, our team brings deep expertise in customer debt, honed through experience in collections and credit risk functions at leading suppliers. Our insights provide expert guidance and address key questions, including:
- How significant are the sector’s customer debt challenges, and what are the key trends?
- What practical actions should suppliers take to better support customers during this challenging period?
- How might increased regulatory focus shape the future of customer debt in the sector?
INSIGHTS
Customer Debt
Record energy debt of £4.48bn reinforces need for deeper, coordinated action
Domestic energy debt has climbed to £4.48bn in Ofgem’s latest update, a ~£55m rise in the last quarter and ~£660m higher than a year ago. It's clear that more is needed to take control of the problem, with pressure set to grow over winter.
Three steps to improve collections as debt continues to rise
In this second article about reducing debt, we’re building on the short-term actions we shared in part one. We’re also featuring the stories and results from a few of our clients to help you take action, including how we delivered ~£50m benefit in 6 months. Being more proactive with your own debt will help you boost collections, improve systems and protect your organisation from future market changes, reforms and challenges.
How to protect customers and profits as household water debt reaches £2bn
Water debt now exceeds £2bn, while customer satisfaction is at an eight-year low, and regulatory pressure continues. It's making collections increasingly difficult, and placing further strain on bottom-line performance. Over the next two articles, we're looking at what it'll take to address this problem. We'll share practical steps to strengthen debt management, improve segmentation, and deliver hidden value.
How to reduce B2B energy debt today and build future resilience
B2B energy debt continues to rise, now expected to stand at £2bn, putting cashflow and capital adequacy under further strain for suppliers. Over the next two articles, we're looking at what it'll take to address this problem.
Energy debt hits record £4.43bn as doubts grow over interventions
Ofgem's latest figures show domestic energy debt has reached a record £4.43bn, increasing by £0.73bn in the past year, and £0.3bn in the past three months. It's the 11th consecutive quarterly rise, reinforcing the urgent need for targeted support.
Report: Ending Water Poverty by 2030 - Are current social tariffs working?
Our latest analysis suggests 25% of households in England and Wales could be in water poverty, yet support remains fragmented and inconsistent. In our full report, we explore the drivers of affordability pressures and present a considered case for a more consistent and effective national approach.
Using accountability and incentives to manage agents effectively
In part three of our Driving Agent Outcomes series, we look at what it takes to build a culture of ownership – from setting clearer expectations to using performance insight in a way that builds confidence. We share practical ways to embed higher standards and stronger accountability at scale.
Using data driven insight to enhance customer interactions
A lot of contact centres have the data, but not the leadership capability to turn it into action. In part two of our Driving Agent Outcomes series, we explore how simple, repeatable routines can help leaders use insight to drive behavioural change.
Transforming debt collection performance with frontline excellence
With customer debt at an all-time high and pressure on contact centres rising, upskilling agents for complex conversations is crucial to drive better outcomes, for your business and customers. In the first article of our four-part series, we share proven insights from our people transformation offering, helping one supplier to unlock £1m in cash within three months.
Energy debt reaches £4.15bn, an increase of £0.84bn in 12 months
Domestic energy debt has reached a new high of £4.15bn in Q1 2025, an increase of £0.84bn compared to Q1 last year. This marks the tenth consecutive quarter of rising domestic debt, growing by ~£300m in the last quarter alone.
Rethinking Fuel Poverty: Targeted Support, Tangible Impact
In March, we published a report with So Energy to better understand the true scale of fuel poverty in Great Britain, and what it’d take to meaningfully reduce it. In this article, we revisit the core insights from that report, look at what’s changed since, and explore what energy suppliers can do now to improve how they identify, engage and support customers who are struggling.
£3.85bn of reasons to address fuel poverty - and how
Fuel poverty is a bigger problem than ever before. Over 20% of households are affected, according to our research with So Energy. Historically high energy prices, inflation, distrust and wider financial challenges are confounding the issue. At a recent roundtable, we sat down with energy suppliers, consultants and debt charities to discuss the issue and potential solutions.
Customer Debt
Meet the Team
Rachel Littlewood
Director
Rachel leads our operational and financial turnaround engagements, helping to solve complex operational challenges while maximising commercial performance and customer outcomes.
Kevin Scott
Director
Kevin leads client engagements with a laser focus on empowering clients to navigate large-scale events and market challenges.
Kev Brown
Senior Manager
Kev leads continuous improvement and lean transformation projects with our clients, supporting customer operations to deliver our Leadership and People Excellence programme.
Jonathan Paton
Senior Manager
Jon specialises in Customer Operations leadership, customer contact, and operational service delivery transformation/improvement.
Jon Vincent
Client Director
Jon helps clients resolve problems with billing, settlements, and customer service.
Joseph Cooper
Manager
Joseph supports our Retail clients to improve their operational processes and business performance.
Customer Debt
Our Impact
Identifying ~£30m cash benefit through debt maturity assessment
We partnered with an energy supplier to assess the maturity of their ~£150m debt book, identifying ~£30m of potential cash benefit through a series of tactical and strategic improvements.
Collecting ~£10m cash through debt campaigns for an energy supplier
We partnered with a medium-sized energy supplier to overlay digital capability onto their debt management process and run bespoke campaigns, leading to improved customer engagement and collections performance.
Delivering ~£50m debt collection benefit for energy retailer
Through our debt maturity assessment, combined with a broader focus on billing and customer contact activity, we identified routes to achieve ~£50m debt collection benefit for an energy retailer. This informed a targeted improvement programme to address capital adequacy challenges, driven by rising debt and BDC.
Unlocking ~£5m in stranded B2B debt for energy supplier
Through a targeted review of debt processes and escalation pathways, we identified a ~£5m recovery opportunity for a B2B energy supplier. By segmenting a ~£20m debt book, improving workflow ownership, and introducing new performance KPIs, we enabled our client to take clearer, faster action on aged and previously inaccessible debt.
Cash recovery initiatives deliver ~£275m benefit for large Energy supplier
Our debt team supported a large Energy supplier with recovering their cash position, achieving a total benefit of ~£275m through collaborative initiatives.
£8.5m cash collection for large energy retailer
We helped a large energy retailer to generate immediate in-year debt benefits through tactical interventions. Our programme delivered ~£4.5m in Bad Debt benefit and ~£8.5m in cash collection, all while maintaining customer and productivity measures within the operation.
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