The UK energy and utility sector is facing a perfect storm – rising costs, tighter regulations and evolving customer expectations. While much attention is on Final Determinations and Price Caps, a crucial change is flying under the radar: the UK Government’s decision to raise employer National Insurance contributions from 13.8 percent to 15 percent in April 2025 while reducing the Secondary Threshold from GBP 9,100 to GBP 5,000 a year. The forecast? Higher employment costs, particularly for customer service teams that are people-intensive.
Balancing Affordability and Customer Experience
Rising employment costs will inevitably squeeze energy and utility providers, forcing them to balance affordability with customer experience. The energy sector already faces increasing bad debt, affordability crises and increased regulatory expectations around treating vulnerable customers fairly.
In this environment, the need for cost-efficient, high-quality service models has never been greater. Companies must re-think their approach to customer service, debt management and affordability conversations: areas which require both human empathy and operational efficiency.
Leveraging strategic partnerships is no longer just about trimming costs; it’s about delivering better outcomes with leaner resources. The right collaboration can help businesses:
Reduce Costs & Stay Agile
Streamlining non-core operations while maintaining service quality
Navigate Regulatory Challenges
Ensuring compliance, particularly around affordability and vulnerable customers
Leverage AI & Automation
Boosting efficiency while keeping customer interactions personal and empathetic
Harnessing AI & Gen AI to Transform Customer Service in Energy & Utilities
AI and Generative AI (Gen AI) are revolutionising customer interactions by enabling smarter, more efficient service delivery. In the context of UK energy and utilities, AI-driven solutions can:
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Automate Routine Enquiries: AI-powered chatbots and self-service tools can manage simple queries, freeing up human agents for high-value conversations.
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Optimise Debt & Vulnerability Support: AI-driven analytics can identify at-risk customers early and provide agents with real-time guidance to offer personalised, empathetic solutions.
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Enhance Onshore Agent Efficiency: AI-led virtual assistants can support complex conversations around affordability, vulnerability and debt resolution, ensuring agents are equipped with the right insights and recommendations at the right time.
For energy and utility providers that are hesitant to move critical customer service functions offshore, a hybrid model presents an optimal solution. By integrating AI-enhanced onshore customer support with cost-efficient service models in back-office and transactional processes, companies can strike a balance: maintaining a high standard of customer service while driving cost efficiencies.
Future-Proofing the Sector with Smarter Service Models & AI
The UK energy and utility sector is at an inflection point. Rising employment costs and evolving customer needs necessitate a new approach to service delivery. By partnering with specialist service providers, companies can build resilient, cost-efficient operations that not only reduce the cost-to-serve but also improve customer outcomes, particularly for vulnerable customers.
As the sector continues to evolve, those who adopt strategic partnerships, AI and Gen AI-driven transformation will be perfectly positioned to thrive in a challenging yet opportunity-rich landscape.
Talk to our experts to explore how AI-driven solutions and strategic partnerships can help your business adapt to industry shifts and enhance customer outcomes.