Responding to Ofgem’s Debt Relief Scheme: Supporting Engagement, Insight and Vulnerable Customers.

Ofgem’s Debt Relief Scheme (DRS) represents a significant intervention in the energy sector. With around 195,000 customers expected to benefit and up to £500m of historic energy debt potentially written off, the scheme marks an important reset for households most affected by the cost-of-living crisis.

The phased rollout, beginning in Q1 2026 for customers in receipt of means-tested benefits, reflects a clear intent: to provide targeted relief while encouraging more sustainable engagement between suppliers and customers going forward.

At Paylink, we welcome this direction. But the success of the scheme will depend not only on debt write-off, but on how effectively suppliers can identify eligible customers, re-engage those who are currently disengaged, and support affordability beyond the point of relief.

Engagement is central to the Scheme

One of the defining features of the DRS is its emphasis on active customer engagement. Debt relief is not automatic for all eligible customers – engagement with the supplier is a key condition of receiving support.

This places a significant operational responsibility on suppliers. They must proactively identify customers who may be eligible, including those who have historically been difficult to reach, and take reasonable steps to bring them back into meaningful engagement.

Energy debt often reflects wider financial pressures, and vulnerability is rarely static or visible through account data alone. Customers experiencing hardship may disengage not because they are unwilling, but because engagement feels overwhelming, complex or inaccessible.

This is where early financial insight and well-timed engagement become critical.

The role of early financial insight

The DRS makes clear that relief alone will not deliver lasting improvement. Writing off historic balances addresses the past, but without better understanding of affordability, there is a risk that customers quickly fall back into arrears.

As the scheme progresses – particularly into Phase 2, where Ofgem has signalled a move towards more robust and standardised approaches to assessing ability to pay – suppliers will need greater consistency, clarity and evidence in how affordability is understood.

Paylink’s Embark income and expenditure platform is designed to support this shift by providing structured, early financial insight.

By analysing income and expenditure in a consistent and repeatable way, Embark helps suppliers:

Identify indicators of financial pressure earlier
Better understand affordability in context
Support proportionate, defensible engagement decisions

This insight supports internal decision-making and engagement strategy. It does not replace regulated debt advice, nor does it recommend outcomes.

Paylink’s Embark Supporting Phase 1 and Phase 2 delivery

During Phase 1 (Q1 2026), where customers on means-tested benefits are prioritised, engagement remains critical even where historic debt is written off. Suppliers are still responsible for ensuring that ongoing arrangements for current usage are affordable and sustainable, particularly for vulnerable customers.

Embark supports this by enabling:

Earlier identification of customers who may struggle post-relief
Timely, tailored digital communications designed to drive engagement
DRS-specific messaging to encourage disengaged customers to re-engage

As the scheme moves into Phase 2, operational complexity increases. The shift away from benefit status as a proxy for need means suppliers must be ready to apply more consistent and structured approaches to understanding affordability across wider customer groups.

Embark helps suppliers prepare by offering:

A scalable, repeatable income and expenditure framework
Greater consistency across teams and customer cohorts
A clearer evidence base for engagement and support decisions

Empowering customers through self-service

One of Embark’s strengths is its self-service digital design. Customers can complete their income and expenditure details at their own pace through a secure online journey, with support available where needed.

For many vulnerable customers, this approach feels more manageable than discussing finances live. It allows individuals to take control, involve a family member, carer or support worker if they wish, and engage at a time that suits them- while providing tools that expedite the process like Open Banking, Creditor Downloads, and Benefits Checkers while maintaining FCA compliant security and increasing accuracy.

By giving customers time and space to complete the process, Embark supports a more truthful and considered picture of affordability – while making engagement feel less daunting and more collaborative.

Looking ahead

The Debt Relief Scheme is an important step forward. But its long-term impact will depend on how well engagement, insight and affordability are embedded into everyday operations.

By combining targeted relief with earlier financial insight and inclusive engagement, suppliers have an opportunity to support fairer, more sustainable customer journeys – and reduce the risk of repeated harm.

At Paylink, we remain committed to supporting that goal.

This article is for general information purposes only and does not constitute financial or debt advice.