Half of households say Government and energy industry need to do more as two million homes face being pushed into debt

Half of households (50%) say support from Government and the energy industry has been inadequate over the last year[1], as it emerges that the looming rise in the price cap could push an additional two million households into debt[2], according to Uswitch.com, the comparison and switching service.

The Government has taken much of the blame for the energy crisis, with two fifths of bill-payers (43%) saying it needs to do more to resolve the problem. A third (33%) say the same about Ofgem, and three in ten hold their supplier responsible[1]. 

Two consecutive rises in the price cap mean that two fifths of people (39%) in fuel poverty have struggled to pay for energy over the past year, compared with a sixth (17%) of better-off households[4]. 

Consumers whose fixed deals have ended during the energy crisis have seen their bills soar as they have moved onto Standard Variable Tariffs at the current price cap level of £1,277.

If the price cap increases to £2,000, monthly bills would increase by £60.25 a month[3], but the average billpayer says they could only afford to pay an extra £33.90 a month[2].  People in fuel poverty — those who pay 10% or more of their household income on energy — say they could only afford to pay an additional £13.70 on average each month[2]. 

People in fuel poverty pay a fifth (22%) more for their energy than the UK average, spending £109.80 a month compared to £90.30 for better-off households[6]. This is partly because people in fuel poverty are 88% more likely to be on a more costly prepayment meter[5]. 

The number of people worrying often — and even daily — about how they will pay their bills has risen by more than half (55%). Only a fifth of households (22%) were concerned this time last year, compared to a third (34%) who are now regularly worrying[7].

People in fuel poverty are much more likely to be worried about their bills, with half (51%) saying they regularly worry about how they will afford to pay them. More than half (54%) of people aged 18-34 also worry about their bills frequently[7]. 

Uswitch continues its calls on the Government to increase support for vulnerable households through the Warm Home Discount scheme, which needs to increase significantly from its £140 annual one-off payment to counter the soaring costs of energy bills.

Those struggling with energy payments can visit the Uswitch website to learn more about what help is available to them depending on their situation. 

Richard Neudegg, head of regulation at Uswitch.com, said: “Make no mistake, millions of households could soon face even tougher choices when it comes to paying their bills, with the looming price cap predicted to reach nearly £2,000 on average. 

“This situation is even worse for those already in fuel poverty, who already pay more for their energy yet are less able to deal with a huge hike in their bills.  

“The Government needs to do much more, and fast, to scale up its targeted support for vulnerable households in a way that reflects the cost increases coming in April. 

“The support offered through the Warm Home Discount payments is in no way sufficient to help the most vulnerable during this crisis, and the payments should be automatic for all who qualify. 

“Now we are in the depths of winter, and people are already struggling with their bills, it is time for the Government to act.”

FOR MORE INFORMATION

Ross Stebbing

Phone: 07827 836 709

Email: ross.stebbing@rvu.co.uk

Twitter: @UswitchPR

Notes

Research conducted online by Opinium, 4 to 10 January 2022, among 2,000 UK energy bill-payers, weighted to be nationally representative.

1. Respondents were asked ‘How do you feel about the support offered by the named bodies (Government, Ofgem and suppliers) during the current energy crisis?’ 43% said the government needs to do more to resolve the current crisis and their support/action has been inadequate, 33% said the same about Ofgem and 31% said the same about suppliers. 50% said support from either the government, Ofgem or suppliers had been inadequate.

2. Respondents were asked ‘If your household bills increased, how much extra could you afford to pay each month without going into debt?’ 8% said ‘I could not cope with any extra expense’, 8% said ‘I’m already paying more than I can afford’. 8% of 27.8 million households = 2.2 million who could be pushed into debt. On average, UK bill-payers said they could afford to pay £33.90 more a month. People in fuel poverty said they could afford £13.70 more a month. 

3. City AM: Uswitch urges government to offer more support to households amid soaring energy costs. Energy price cap is currently £1,277 a year. If price cap rose to £2,000, this would be a £2,000 - £1,277 = £723 increase. £723 / 12 = £60.25. 

4. Respondents were asked ‘Have you struggled to pay your energy bills in the past 12 months?’. 39% of people in fuel poverty said ‘Yes’, 17% of people not in fuel poverty said ‘Yes’. 

5. Respondents were asked ‘What kind of energy tariff/meter are you on?’ 8% of people not in fuel poverty said they were on pre-payment meter compared to 15% of people in fuel poverty. Percentage difference between 8% and 15% = 87.%. 48% of those not in fuel poverty are on a fixed tariff compared to 35% of those in fuel poverty, 31% of people not in poverty are on an SVT versus 37% of people in fuel poverty.

6. Respondents were asked ‘How much do you pay for your energy bills each month? If you do not pay a monthly figure, please calculate the amount you would pay for a typical month’s energy usage.’ The UK average is £91.90. People not in fuel poverty said £90.30, people in fuel poverty said £109.80. 

7. Respondents were asked ‘Thinking about your current household bills, how often do you worrying about paying them now compared to this time last year?’ 34% said they worry daily/often now, compared to 22% a year ago. 51% of people in fuel poverty worry daily/often, 33% of those not in fuel poverty worry daily/often. 54% of 18-34 year olds worry daily/often, along with 38% of people aged 35-54 and 18% of people 55+.

About Uswitch 

Uswitch is one of the UK’s top comparison websites for home services switching, including broadband, mobiles, SIM Only and insurance. We’ve saved consumers over £2.5 billion off their bills since we launched in September 2000.

In 2022, Uswitch launched its free mobile app, Utrack, to help consumers manage their home energy costs. By connecting to their smart meter, users can track their energy usage hourly, get dynamic insights and calculate potential savings with handy tips. 

Uswitch is part of RVU, a global group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.