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Millions of people across the country are already in debt to their energy supplier before winter begins, according to new Uswitch research. The new study found that 2.8 million households owe a total of £188 million to their gas and electricity providers.
Compared to this time last year, almost half a million more homes are in energy debt - a 22% increase. The average owed by households is £68.20. If those in debt, 65% say they owe their supplier the same amount or more than they did last year, with only 13% owing less this year.
While most people will find the amount of credit or debit on their energy account fluctuates throughout the year, households should ideally be in credit before winter to prepare for higher usage as the temperature drops. These customers could see their monthly payments increase to cover the debt and extra usage.
According to the study, 9.6 million households are worried about how they are going to pay their energy bills this winter. To combat this, 14% say they won’t put their heating on even when it’s cold, while 8% plan to spend more time out of the house to avoid putting the heating on.
Worryingly, 1.9 million households say they will spend less on food this winter so they can afford to pay for their energy bills. Nearly four in ten (37%) say they will wear more layers of clothing to keep warm, with 31% switching off more appliances and 26% planning to turn the thermostat down to reduce their bills.
Sarah Broomfield, energy expert at Uswitch, said: “It’s incredibly worrying that so many more homes have found themselves in energy debt as we head towards the coldest time of the year.”
Uswitch research also found that energy companies could do more to support those in debt. More than half of households that owe money to their supplier (54%) saiff they had not been contacted about the debt. Only a fifth (22%) said their supplier had been in touch to organise a repayment plan or offer advice.
For those in debt to their supplier, there are a number of options available. Switching supplier could help to make bills more manageable, although this can depend on the level of debt you're in.
If you’re on a credit meter and have been in debt for less than 28 days, you’re free to switch supplier. Alternatively, you could consider switching to your supplier’s cheapest deal to help cut your bills. Those on prepayment meters can switch supplier with debt of less than £500 per fuel - although it’s still advisable to organise a prepayment plan. Our guide explains more about what to do if you’re in debt to your energy supplier.
There is also extra help available for vulnerable customers or those on certain benefits, including the Warm Home Discount, Winter Fuel Payment and Cold Weather payment. Take a look at our guide and use the interactive tool to see if you’re eligible for the schemes.
Sarah Broomfield said: “It’s clear that there’s room for energy companies to do more to make customers aware if they are falling behind on their bills, and lay out the options or help available for paying off that debt.”
“Anyone who is worried about their debt should contact their supplier as soon as possible to set up a repayment plan. They can also ask for energy savings advice and check if they are eligible for free insulation grants, such as the newly launched Green Homes Grant, to help keep costs down longer term.
“It’s also alarming that nearly two million households will be forced to choose between heating or eating, just to make ends meet.”