Across the UK’s utility sectors, affordability is fast becoming the defining challenge of 2026. Energy debt has now reached £5.5 billion, water companies are preparing for another year of above inflation bill increases, with 2.5 million households already receiving some form of financial support. Broadband, mobile, and council tax rises arriving in April will compound the pressure further.
Customers do not experience these pressures in silos, and neither do regulators. Whether in energy, water, or telecoms, the expectation is the same: utilities must intervene earlier, more consistently, and with a clearer understanding of who their customers are and what they need.
In a year where affordability schemes are expanding and regulatory scrutiny is intensifying; it is clearer now more than ever that you cannot support customers you do not understand.
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.
- Energy debt: £5.5bn and rising
- Water: bills increasing; support schemes expanding to record levels
- Telecoms: above inflation price rises driving affordability concerns
- 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
- Benefits status
- Payment history
- Contact details
- Household composition
- Vulnerability indicators
Without clean, reliable data, even the best designed affordability strategies will fail.
2. Meaningful segmentation
- Who needs support now
- Who is at risk of falling into arrears
- Who is eligible for regulatory schemes
- Who requires tailored communication
Segmentation must reflect real-world customer behaviour, not generic categories.
3. Systems that support early intervention
- Automated triggers for risk indicators
- Integrated vulnerability recording
- Consistent affordability assessments
- 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
Reach out if you want to talk through any challenges or action plans you are putting together.
Our collections analytics service will:
- Identify internal and external data sources that can be levered to understand customer circumstances, preferences and behaviours
- Use predictive analytical modelling to identify predictive variables and build propensity based scorecards
- Devise appropriate treatment paths for defined segments of customers
- Analyse tranche level performance to identify changes in performance over time
Financial Vulnerability Score (FVS)
FVS combines portfolio data, customer engagement patterns, and affordability signals to deliver a transparent, explainable view of vulnerability, complete with reason codes and recommended treatment paths.
When integrated into modern, cloud-native collections platforms, FVS can automatically trigger next best actions and inform engagement strategies in real time, supporting early intervention and consistent experiences across all channels.
Designed to align with global regulatory requirements, FVS enables firms to move away from uniform treatments and ensure customers receive appropriate, auditable support.
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About the Author
Chloe Charles, Senior Consultant
Chloe is a Senior Consultant at Arum Global, specialising in collections strategy, systems, and operational improvement. With a strong academic foundation from Warwick Business School, Chloe works closely with clients across financial services and utilities to deliver practical, data-led solutions that improve customer outcomes and performance. She brings a thoughtful, client-first approach to navigating regulatory change and advancing modern collections practices.