Energy provider Ovo has been ordered to pay out £2.7 million in compensation to thousands of customers who experienced significant delays in receiving crucial government-backed warm home discount payments. The energy watchdog Ofgem announced the substantial payout after an investigation revealed that nearly 12,000 customers received their support payments more than nineteen months late.
Vulnerable Households Left Without Winter Support
According to Ofgem, the Bristol-headquartered company missed a critical deadline of March 31, 2024, for distributing the warm home discount payments. The delayed funds finally reached affected customers in November 2025, leaving many vulnerable households without essential financial support during the coldest winter months. The scheme, administered by Ofgem on behalf of the government, specifically targets energy consumers on low incomes who are vulnerable to cold-related illnesses or living in fuel poverty.
Internal System Error Caused Widespread Delay
Investigations indicate that an internal system error within Ovo's operations caused the widespread payment delay. This administrative failure meant that some of the most vulnerable energy customers in the country were deprived of the financial assistance they were legally entitled to receive. Of those affected, 7,726 customers were registered on the Priority Services Register, classifying them as vulnerable energy consumers, with 4,066 of those individuals being medically vulnerable.
Compensation Structure for Affected Customers
The compensation package approved by Ofgem includes several components designed to address the harm caused by the payment delays:
- All impacted customers will receive £150 as basic compensation
- Medically vulnerable customers will receive an additional £150 payment
- Customers who experienced self-disconnection between March 31 and May 31, 2024, will receive £100 for each instance
Business Live understands that Ovo has already contacted all affected customers and that compensation will be processed automatically, requiring no further action from recipients.
Regulatory Response and Supplier Accountability
Neil Lawrence, director of delivery and schemes at Ofgem, emphasised the importance of timely payment delivery for vulnerable consumers. "The warm home discount is a vital source of support for vulnerable energy consumers," Lawrence stated. "Delays of this magnitude can cause real harm, particularly for those experiencing fuel poverty who also have medical needs. Suppliers must act swiftly and accurately to deliver these payments on time – where this does not happen, we will intervene and are prepared to take strong action."
Lawrence acknowledged that while Ovo fell significantly short of its obligations, the company has taken positive steps to address the situation. The regulator expects all energy suppliers to maintain robust processes and respond quickly when issues arise, warning that failures of this nature are unacceptable and will trigger regulatory intervention.
Company Apology and Preventative Measures
An Ovo spokesperson expressed regret over the payment delays, stating: "We're very sorry that some customers did not receive their warm home discount payments on time. We have worked closely with Ofgem to understand what went wrong and to put measures in place to ensure it does not happen again. We did not meet the high standards of service we set for ourselves, and all affected customers have now been compensated."
Ofgem has confirmed it will continue monitoring all energy suppliers' compliance with their warm home discount scheme obligations, with particular emphasis on ensuring timely payments during the winter months when vulnerable consumers need support most urgently. The regulator's intervention in this case demonstrates its commitment to holding energy companies accountable for delivering essential financial assistance to those who need it most.
