British Gas says thousands of customers can afford their energy bills but simply won’t pay
Key Points
- British Gas booked a £216 million bad debt charge in H1 2026, up 36% from £159 million a year earlier
- Centrica says it is pressing Ofgem to act on customers who are able to pay but choose not to
- Total provisions for unpaid customer debt across the group now stand at £2.07 billion
- Energy UK projects sector-wide consumer energy debt will reach around £7 billion this year
- Court warrant activity remains suspended, which Centrica says is hurting debt recovery
British Gas wrote off £216 million in unpaid customer bills in the first six months of 2026 and says part of the problem is households that can afford to pay but choose not to.
The bad debt charge, disclosed in owner Centrica’s 2026 interim results, jumped 36% from £159 million in the first half of 2025 and now exceeds 4% of UK residential revenue.
Centrica described the figure as elevated against historic levels. The company said it continues to press Ofgem “to take more proactive steps to address the non-payment of energy bills by those who are able to pay but choose not to.”
Centrica’s total provision for credit losses on trade and other receivables reached £2.07 billion at 30 June 2026, up from £1.82 billion at the end of December.
The group recognised £283 million in credit losses net of recoveries during the half, equivalent to 2.8% of total revenue, with £278 million of that arising from energy customers in its Retail division.
Why the debt keeps rising
Centrica attributed the growth in overdue balances to two cohorts: customers who pay on receipt of their bill and former customers on final bills, many of whom accrued debts during the energy crisis that they remain unable to clear.
The suspension of warrant activity, which followed Ofgem’s investigation into prepayment meter installations, continues to hold back collections from affected customer groups.
The company holds provisions against 44% of all billed receivables, meaning it expects to recover barely more than half of the money customers currently owe.
The picture at British Gas mirrors the wider market.
Energy UK projects consumer energy debt across the sector will rise to around £7 billion this year. Centrica warned that rising unemployment, higher wholesale prices driven by geopolitical tensions and an expected increase in the price cap in the second half of the year create an uncertain outlook for collections.
Support for those who genuinely cannot pay
Centrica draws a distinction between non-payers who have the means and customers in genuine hardship.
Under its May 2026 settlement with Ofgem over legacy prepayment meter installations, British Gas agreed to pay £20 million into the regulator’s redress fund and write off up to £70 million in energy debt for vulnerable customers.
A new advisory panel of independent experts will guide its treatment of vulnerable customers in debt.
The company welcomed the government’s decision to remove VAT from domestic electricity bills from October 2026 and repeated its call for a targeted support scheme for low-income customers funded by general taxation.
It also wants data sharing between government departments and suppliers so support reaches the right households before winter.
Despite the debt burden, British Gas’s Retail division grew adjusted EBITDA to £346 million in the half, up from £338 million a year earlier.
