A government plan to wipe out £500 million of energy debt for Britain’s neediest households has stalled, leaving the Debt Relief Scheme stuck in limbo just as unpaid bills keep climbing. Industry insiders warned the delay could push total arrears to £7 billion by the end of the year.

Ofgem introduced the scheme last October and expected it to begin rolling out in early 2026, but legislative hurdles still have to be cleared before it can move forward. The regulator’s plan depends on changes that would let energy suppliers and government bodies share data so eligible benefit-receiving households can be identified and helped automatically.

That is the part now holding everything up. Consultations on widening those data-sharing powers are still under way, and Ofgem said it is ready to launch once approval arrives. “We’re prepared to launch as soon as we receive approval, but ministerial action is needed now,” an Ofgem representative said.

The scale of the delay matters because the debt problem is already larger than it was when the scheme was drawn up. Energy UK estimates consumer debts have reached £5.5 billion, a sign that arrears are growing faster than the relief plan can be delivered. The scheme was designed for Britain’s poorest households, but it cannot reach them until the approval process is complete.

That leaves ministers with a narrow choice: move quickly on the legislative changes or watch the debts swell further before any relief can begin. For households already struggling with energy bills, the promise of help is no longer a policy question on the horizon. It is waiting on a decision.