Fuel Direct Scheme 2026-27

Last reviewed: 26 October 2026

If you are struggling to pay your energy bills, the Fuel Direct scheme may be a way to repay what you owe. It lets your energy supplier ask the Department for Work and Pensions (DWP) to take small, fixed amounts from your benefits to pay off an energy debt, and in some cases to cover your ongoing gas and electricity use.

This guide explains who can use the scheme, how much is taken, how it is set up, and what to do if the payments are not affordable.

What is the Fuel Direct scheme?

The Fuel Direct scheme, also known as third party deductions, is a system where the DWP takes an amount directly from your benefits and pays it to your energy supplier. The deduction is made automatically each time your benefit is paid until the debt is cleared.

The main advantage is that it can stop an energy debt from growing, and it means you do not have to remember to make repayments. Citizens Advice says it is usually better than getting a prepayment meter.

Who is eligible for Fuel Direct?

GOV.UK says the benefits that can be used are:

• Universal Credit
• Income-related Employment and Support Allowance (ESA)
• Pension Credit

Citizens Advice also lists Income Support as an eligible benefit. If you work and receive Universal Credit, your earnings must be below your work allowance.

Fuel Direct is mainly used to repay an energy debt, so you need to owe money to your energy supplier. Your supplier may also ask to include your ongoing energy use.

How much is taken from your benefits?

For energy debt, GOV.UK says the following is deducted for each debt you owe:

• Universal Credit: 5% of your benefit payment.
• Other benefits: £4.80 a week.

Money can be deducted to pay off up to 3 debts at once.

According to Shelter, the 5% for Universal Credit is based on your standard allowance. From April 2026, this works out at about:

Your supplier may also ask you to pay for your current energy use through the scheme. You must agree to this, and you can give your consent by phone. The amount should cover the cost of the energy you use. If the total deductions would go above 25% of your main benefit, DWP asks for your consent.

For example, if you receive a benefit other than Universal Credit, owe one debt and use £10 of energy a week, your deductions could be £14.80 a week: £10 for your ongoing use and £4.80 towards the debt.

Deductions continue until the debt is paid off. If your circumstances change in a way that affects your benefits, the payments may be adjusted.

How do you apply for Fuel Direct?

The process starts with your energy supplier, not your local jobcentre. Citizens Advice says your supplier can ask your benefit provider to use some of your benefits to pay off your debt. Your supplier does not need your permission to do this, but it should try other ways to help you repay the debt first.

If you want to use the scheme for your ongoing bills, contact your supplier to set it up. You can give your consent over the phone, and it does not need to be in writing.

Before you contact your supplier, it helps to have the following ready:

• how much you owe and which supplier you owe it to
• the benefit you receive
• a realistic idea of what you can afford each week or month

Can you stop or change Fuel Direct?

You can stop deductions for ongoing bills at any time by contacting the office that pays your benefit. If you stop, you need to arrange another way to pay your supplier. To change the amount, contact your supplier.

If you think a deduction is wrong, for example because the debt has been cleared but the payments have not stopped, you can ask for a mandatory reconsideration. How you do this depends on your benefit:

• Universal Credit: through your online account or the Universal Credit helpline.
• Income-related ESA: through Jobcentre Plus.
• Pension Credit: through the Pension Service helpline.

What happens once your energy debt is cleared?

Once the debt is paid off, the deduction usually ends. If you receive Universal Credit, deductions for ongoing bills stop when you have repaid your debt. If you receive another benefit, you can ask to keep paying your bills this way.

After that, you will be responsible for paying your supplier yourself, so it is worth planning ahead. Free tools such as the MoneyHelper Budget Planner can help you keep track of your spending.

What if the deductions are not affordable?

Fuel Direct is not the only option. Depending on your situation, you could:

• Ask for a payment plan. You agree to repay the debt in instalments alongside your current usage. Your supplier must consider how much you can afford, and you can ask for a short pause in repayments if you cannot keep up.
• Speak to your supplier about other support. Tell your supplier if you need extra support, for example because you are disabled or have a long-term health condition.
• Get independent advice. If you cannot reach an agreement with your supplier, you can contact the Citizens Advice consumer service.
• Switch supplier. In some cases, changing supplier could put you on a better deal. Read our guide on whether you can switch suppliers with your existing debt.

Can you get other help with energy bills?

Depending on your circumstances, you may also qualify for:

• Warm Home Discount: a one-off £150 discount on your electricity bill if you meet the scheme’s eligibility requirements.
• Winter Fuel Payment: a payment of between £100 and £300 for eligible older people during winter 2026-27.
• Cold Weather Payment: £25 for each qualifying 7-day period of very cold weather if you receive certain benefits and meet the scheme’s conditions.

Eligibility and application rules differ between schemes. Check the relevant government guidance to find out what support you may be entitled to.

You can also read our guides to the Warm Home Discount, Winter Fuel Payment, Cold Weather Payment and other energy grants and schemes.