Affordability insights: why utilities must know their customers

Energy: proactive, data-driven affordability

Ofgem's latest debt strategy update highlights a system under strain. Arrears continue to rise, and three-quarters of energy debt now sits with customers who have no repayment plan in place. The regulator is explicit: suppliers must use better data, identify vulnerability earlier, and deliver tailored, proactive support.

Water: rising bills and expanding support schemes

Water UK has confirmed that average household bills will rise again from April 2026. Companies are expanding affordability schemes to reach more customers, but this requires accurate identification of who needs help, and when. Without reliable customer data, even well designed support schemes risk missing the mark.

Telecoms and broadband: affordability under scrutiny

Inflation linked price rises across broadband and mobile services have triggered growing concern from consumer bodies. The expectation is shifting toward greater transparency, clearer communication, and earlier intervention for customers at risk of falling behind.

Geopolitical volatility: why insight matters even more

The ongoing conflict in the Middle East has introduced substantial volatility into global energy markets. If the conflict is prolonged, the impact on UK energy bills is likely to be significant, potentially reversing recent stabilisation and pushing more households into financial difficulty.

In this environment, customer insight becomes a resilience tool.

Utilities that understand their customers' circumstances, behaviours, and vulnerabilities will be better positioned to:

• anticipate rising arrears
• target support before debt escalates
• protect customers from harm
• manage operational and financial risk
• Those without this insight will be left reacting to problems long after they have materialised.

The cross-utility debt picture cannot be ignored

The affordability challenge is no longer confined to energy.

Council tax: further increases adding to household strain

For many households, these pressures accumulate. A customer struggling with energy bills is likely to be struggling with water, broadband, and council tax too.

This is why knowing your customer is not just a regulatory expectation, it is basic operational hygiene.

What "knowing your customer" really means in 2026

Utilities often talk about customer insight, but in practice, it requires a disciplined, data driven approach.

1. Accurate data

Vulnerability indicators

Without clean, reliable data, even the best designed affordability strategies will fail.

2. Meaningful segmentation

Who requires tailored communication

Segmentation must reflect real-world customer behaviour, not generic categories.

3. Systems that support early intervention

Clear pathways for support

This is where many utilities still struggle, and where regulators are increasingly focused.

What good looks like: practical steps for utilities

Utilities that lead on affordability in 2026 will be those that:

• invest in data quality and governance
• strengthen affordability assessments
• build proactive vulnerability identification models
• improve cross utility data sharing where permitted
• train frontline teams to recognise and record vulnerability
• ensure systems can deliver regulatory schemes at scale
• These are not optional enhancements. They are the foundations of a resilient, customer focused operation.

The Debt Relief Scheme: a real-world test of customer insight

The first phase of Ofgems Debt Relief Scheme (DRS), expected to launch in early 2026, will provide targeted support to customers:

• in receipt of means tested benefits, and with £100+ of energy debt built up during the energy crisis (April 2022-March 2024).
• This is a significant intervention, but it also presents a significant operational challenge.

To deliver the scheme effectively, suppliers must be able to identify eligible customers with confidence. That requires:

• accurate benefits data
• clean billing and CRM systems
• up-to-date vulnerability markers
• reliable contact information
• segmentation that reflects real-world customer circumstances
• Without this foundation, suppliers risk mis-targeting support, breaching regulatory expectations, or failing to reach the customers the scheme is designed to help.
• The DRS is, in many ways, a litmus test for the sector's data maturity. If a utility cannot reliably identify who is eligible, it cannot deliver the scheme compliantly.

Conclusion: affordability starts with insight

As affordability pressures rise and regulatory expectations sharpen, the utilities that succeed will be those that build a deep, accurate, and actionable understanding of their customers.

During the coming months, knowing your customer is not a differentiator, it is the minimum standard regulators expect. It is also the only sustainable path to reducing debt, protecting vulnerable households, and building trust in a sector under unprecedented pressure.

Utilities that get this right will not only meet regulatory expectations, but they will also be better prepared for whatever comes next.

Across all sectors, the message is consistent: Know your customer. Evidence your decisions. Intervene early.

How we can help

Our collections analytics service starts with the data you already hold.

• Identify the internal and external data sources that reveal customer circumstances, preferences and behaviours.
• Use predictive modelling to find the variables that matter and build propensity-based scorecards.
• Devise treatment paths for defined customer segments.
• Analyse tranche-level performance to see how it changes over time.

Financial Vulnerability Score (FVS)

FVS combines portfolio data, customer engagement patterns and affordability signals into a transparent, explainable view of vulnerability, with reason codes and recommended treatment paths. Integrated into a cloud-native collections platform, it can trigger next best actions and inform engagement strategies in real time, which supports early intervention and consistent treatment across channels. It is designed to meet global regulatory requirements, so firms can move away from uniform treatments and give customers support that is appropriate and auditable.

If you would like to talk about navigating affordability with your customers, fill out the form below.