Households owe £318 million to energy suppliers before winter begins
Energy debt rises 9%: households start autumn £318 million in debt to their energy suppliers – at a time when they should be in credit
One in ten – the equivalent of 2.6 million households – already owe their energy supplier an average of £121
Almost a third (28%) have no repayment plan or can’t afford to pay it back
Four in 10 (38%) are already worrying about winter energy bills, with more than a third (36%) saying that recent price rises will cause them to go cold this winter
Uswitch.com urges consumers to take control of their energy bills and switch to a cheaper deal before the colder weather arrives.
A staggering 2.6 million households are heading into winter in debt to their energy supplier, owing a collective £318 million, according to new research from Uswitch.com, the price comparison and switching service.
One in 10 bill payers – the equivalent of 2.6 million households – are facing winter already owing their supplier an average of £121. This is an increase of 9% compared to the same time last year, or an extra £26 million that will need to be repaid.
Households who pay by direct debit usually build up credit over the summer months to provide a buffer that can cover increased energy as the weather gets colder. But if consumers don’t take action now then their level of debt is only likely to increase over the winter.
The problem may have been compounded by this year’s unseasonably cold August, when Uswitch.com revealed that three in 10 Brits – the equivalent of over 8 million households – had already turned on their central heating.
Almost a third (31%) of those in debt are planning to pay it off by increasing their monthly direct debit, while a fifth (21%) expect to pay it off in a lump sum. Worryingly, nearly one in three (28%) have no plan in place for repaying what they owe, or say they cannot pay it back at all in spite of the huge savings available through switching to a cheaper deal.
Almost four in ten (38%) households are worried about the cost of their winter energy bills, a 6% increase since August this year. And in an attempt to cut bills after big price rises from all of the major energy suppliers, over a third (36%) are already considering rationing the amount of gas and electricity they will use over the winter.
Families can stay warm and pay less by switching to a better tariff, which could be up to £618 cheaper than their current deal. More than nine in 10 bill payers (93%) know that they can save money by changing energy supplier, yet only a quarter (25%) are planning to do so within the next 12 months. Rather than sticking with their existing company and being forced to go cold this winter, Uswitch.com urges consumers to stop paying over the odds for their energy and move to a cheaper deal.
Customers in debt to their supplier by less than £500 are usually still able to switch, but they should still devise a manageable repayment plan. Debt charities such as StepChange are on hand to provide advice and guidance for people experiencing financial difficulties.
Claire Osborne, energy expert at Uswitch.com, says: “We’re only just into autumn but already millions of households are in debt to their energy supplier. With the days now getting shorter and the heating staying on for longer it may be easier than you think to get out of the red and take control of your energy bills.
“Households have suffered a barrage of price rises this year but they can turn the tables on the energy companies by voting with their feet, and save hundreds of pounds in the process. A cheaper tariff could mean the difference between shivering through the winter and potentially becoming ill, or having a warm home.
“More than 60% of us are still on expensive standard tariffs, needlessly paying more for the same gas and electricity as they could get on a cheaper deal. Switching is quick and simple and means consumers can start saving right now before we head into winter.”
Find out how you could save over £1,000 a year with Uswitch here.
It takes less than 15 minutes to compare and switch to a better tariff. For those who have never switched, there is an easy to follow guide on Uswitch.com or people can call our helpline on 0800 6888 557. And for those who prefer to use their smart phone, download the Uswitch mobile app, scan the QR code on your energy bill, and you can compare deals and switch in seconds.
FOR MORE INFORMATION
Tim Dunford
Phone: 020 3872 5612
Mobile: 07785 552666
Email: tim.dunford@uswitch.com
Twitter: @uswitchPR
Notes to editors
Research was conducted by Opinium between 19th and 22nd September 2017, among 2,006 adults in the UK responsible for paying energy bills.
Similar research by Uswitch in November 2016 found that consumers owed £292 million to their suppliers: https://www.uswitch.com/media-centre/2016/11/consumers-head-into-winter-292-million-in-debt-to-energy-suppliers/. Therefore debt has increased by £26m, or 9%.
When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’, 10% of respondents were in debt to their energy supplier. The average amount of debt owed by these respondents was £121.34. There are 27.1 million households in the UK (source: ONS). Therefore 2.62m households owe a collective £318,006206
When those is debt were asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how are you planning to pay it off?’, 31% said ‘By increasing my monthly direct debit’, 24% said ‘I’m hoping it will go away naturally over time’, ‘21% said ‘By lump sum’, 12% said ‘By agreeing a repayment plan with my energy supplier’ and 4% said ‘I won’t be able to afford to pay it off’.
When asked ‘How worried are you about your energy bill this winter?’, 38% of respondents said they were ‘Very worried’ or ‘A little worried’. In July 2017, similar research found that 32% were worried about the cost of their energy bills this winter: https://www.uswitch.com/media-centre/2017/08/one-in-three-brits-already-worrying-about-this-winters-bills-as-uswitch-reveals-the-nations-energy-switching-habits/.
When asked ‘Have the recent energy price rises made you consider rationing your gas or electricity?’, 36% of respondents said ‘Yes’.
Between 1 June 2016 and 30 November 2016, at least 10% of people who switched energy supplier for both gas & electricity with Uswitch saved £618 or more.
When asked ‘Are you aware that you could be able to save money on your energy by switching supplier?’, 93% of respondents said ‘Yes’. When asked ‘Are you planning to switch energy supplier in order to reduce your bills within the next 12 months?’, 25% of respondents said ‘Yes’.
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