Centrica said challenges with collecting unpaid energy bills would weigh on its profits for the year. It said earnings from the retail operation would be at the lower end of its previous guidance, citing “continued challenges in residential energy bad debt collection”.
The company admitted that at least £812m in unpaid household energy bills has been owed for more than a year – meaning it will be very difficult to recover.
It said: “Cost of living challenges, including increased energy bills and mixed macroeconomic conditions, continue to affect customers’ ability to pay their bills.
“This, coupled with the continued suspension of prepayment meter fitting activity, has led to an increased level of overdue debt.”
Centrica and British Gas became the centre of a national scandal in 2023 after an undercover investigation by The Times.
The investigation revealed that debt collectors acting on behalf of the company were forcibly entering the homes of vulnerable customers – including those with disabilities and mental health conditions – to install prepayment meters.
Public outcry over the findings led to an immediate suspension of forced installations by all major UK energy suppliers and a series of regulatory interventions by Ofgem.
Surge in ‘can pay, won’t pay’
However, it has added to difficulties for energy companies collecting unpaid bills.
Industry insiders argue that many homes are genuinely struggling. However, there has also been a surge in “can pay, won’t pay” customers who dodge bills using legal loopholes that make it hard for suppliers to cut them off.
Energy companies argue that this is driving up bills for all customers because households are paying a surcharge to cover the missing money.
Kevin O’Byrne, the Centrica chairman, told shareholders that energy affordability and debt were “a serious and growing challenge” which needed government action.
He said: “We have called for joined-up action to address the debt challenge across Government, the regulator, suppliers and the charity sector.
“We need to be helping those who genuinely cannot pay, while ensuring those who can pay do pay, so that debt does not continue to build and the financial resilience of the energy market is maintained.”
Other energy suppliers have also warned of concerns about rising customer debts.
EDF, which supplies three million households, said in February that its debts owed for more than 30 days had reached £514m, up from £483m in December 2024. One in four EDF customers carried some debt.
Claire Coutinho, the shadow energy secretary, said: “Everyone suffers when energy debts rise because the cost is spread over everybody else’s bills. This is why the Government’s failure to tackle the root cause of soaring energy bills – Ed Miliband’s policies – is so damaging.”
The Government was contacted for comment.
