Record levels of energy debt are being reported by Scottish charities, who warn that this summer’s 13% rise in the price cap will be “devastating” for households already struggling to keep up.
Ofgem’s price cap is set to increase by £221 a year from 1 July, taking the average annual household bill to £1,862. Citizens Advice Scotland (CAS) said the increase would be “impossible for so many people to absorb”, with its network already seeing average energy debts of more than £2,800 in the first three months of 2026. For rural Scots that figure rises above £3,200.
The surge has been driven by the conflict in the Middle East – the US-Israeli war with Iran – which has disrupted maritime routes including the Strait of Hormuz, through which a significant portion of global oil and liquefied natural gas trade passes. The International Energy Agency has described the resulting fuel shock as “the largest supply disruption in the history of the global oil market”. Wholesale gas prices in Britain are now 45% higher than before US military operations against Iran began in February, according to market data. Global oil prices have risen by around 12% since the conflict started.
While overall electricity bills are expected to rise by about 5%, gas bills will jump by 24% – a direct consequence of the wholesale gas price volatility. The relatively smaller increase in electricity is attributed to the growing share of renewable generation on the grid, which reduces reliance on gas-fired power stations. Even so, the average household using both gas and electricity will face an extra £18 a month. Early forecasts suggest the cap will rise again in October, meaning even higher costs during the colder winter months.
Craig Tobin of Advice Direct Scotland, which runs the national energy advice service, described the increase as “one of the largest in the price cap since it was brought in five years ago” and a “summer shock” for thousands of households. He noted that under the new cap people will be paying over £700 a year more than before the energy crisis first hit half a decade ago.
The scale of debt is stark. Consumer Scotland’s latest Energy Affordability Tracker, covering January and February 2026, found that 19% of households reported being in energy debt – a sharp rise from 9% in 2024. Ofgem’s own data shows total energy debt and arrears reached £4.4 billion in the second quarter of 2025, a 20% increase over the previous twelve months, with lower earners disproportionately affected. Meanwhile, 38% of households said they could not heat their homes to a comfortable level, and 16% were struggling to keep up with bills. A worrying 36% of those in energy debt have been moved onto prepayment meters, with Citizens Advice reporting record numbers of people unable to afford to top them up – a trend that, while slightly lower in early 2024, remains far higher than historic levels.
Rural communities are bearing the brunt. Colder climates, less energy-efficient housing stock and higher consumption drive average debt to more than £3,200 in remote areas, compared with the national average of £2,800. Last summer alone, Citizens Advice Scotland provided over 2,000 emergency fuel vouchers across Scotland, its chief executive Derek Mitchell said. “It’s tempting to think high energy costs don’t affect people in the summer. Yet, last summer, we provided over 2,000 emergency fuel vouchers across Scotland. We can’t go on like this. People need support both now and in the long term.”
Mr Mitchell urged Ofgem to urgently deliver a debt relief scheme and to introduce a social tariff that would give low-income households a discounted rate. Ofgem is developing a Debt Relief Scheme, with phase one aiming to write off eligible debts incurred between April 2022 and March 2024 for customers on means-tested benefits. But critics argue the cut-off date is too early given the ongoing crisis. Some have suggested funding the scheme through windfall profits from energy network companies.
Political reactions and calls for devolution
Stephen Flynn, the Economy Secretary, said the price rise would “hit families hard”. Scotland’s Energy Minister, Stephen Gethins, used the announcement to renew calls for the devolution of energy powers from Westminster to Holyrood. “People across Scotland are already struggling to afford their energy bills – and today’s confirmation of a further price hike will be extremely concerning,” he said. “We are one of the most energy-rich nations in the world, yet pay some of the highest energy bills in Europe – it just does not add up. In an energy-rich country like Scotland, nobody should be struggling to pay their bills – and the fact that so many are shows the fundamental problem with having control of Scotland’s energy resources in the hands of Westminster governments.”
Polling indicates that over half of Scots – 51% – believe energy policy should be devolved to the Scottish Government, with a third wanting it to be a completely devolved matter. Currently, the Scottish Parliament has some control over planning regulations affecting renewable power, but the vast majority of energy powers remain reserved to Westminster.
UK Energy Secretary Ed Miliband described the rise as “deeply unwelcome news” and said it was caused by “a war we did not choose”. He added: “We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority. We will continue to monitor the situation ahead of the winter and plan for all contingencies. In the immediate term it is essential to de-escalate this conflict to bring oil and gas prices down and as Britain faces the second fossil fuel crisis of this decade, we must learn the right lessons. The way to get bills down for good and avoid these price spikes is to go further and faster with this Government’s drive for clean homegrown power we control. We are upgrading as many homes as possible ahead of winter with the biggest investment in warm homes in British history.”
Broader energy policy discussions
Sam Ghibaldan, chief executive of Consumer Scotland, said the volatility of fossil fuels demonstrated the urgency of moving to low-carbon energy sources. Consumer Scotland has called for more targeted support, better use of data, and backing for Ofgem’s proposed Debt Relief Scheme. Advice Direct Scotland also emphasised the need for households to claim all benefits they are entitled to, noting that billing issues and back-billing remain common concerns.
The GMB union warned that the situation showed the “sheer folly” of relying on overseas energy sources, leaving the UK “brutally exposed to the whims of the market”. It argued for a balanced energy mix that includes renewables, gas and nuclear, and for policies that protect jobs and industrial competitiveness. The union’s comments come as the UK’s energy prices remain among the highest in the developed world, a situation compounded by the link between gas and electricity prices – gas often sets the wholesale electricity price – which the government is now examining how to break in order to shield consumers from future shocks.
Around 40% of households are on fixed tariffs and will not be directly affected by this particular price cap increase, but for the majority of the country – and particularly for the most vulnerable – the summer months promise no respite. “We can’t go on like this,” Derek Mitchell said. “People need support both now and in the long term.”
