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Households already owe £1.3billion to energy suppliers ahead of winter bills timebomb

  • Energy debt is at an all-time high with £1.3 billion owed to providers[1] – more than 250% higher than it was in September last year[2]

  • Six million households owe an average £206 to providers[1], 10% more than they owed in April and at a time of year when they should usually have built up credit to cope with winter bills

  • The number of homes in credit has dropped from 11 million to nine million since April

  • Eight million households have no credit balances at all[3], leaving them with no protection from hardship in the coming months

  • Uswitch is urging households who can’t keep up with energy bills to contact their suppliers and request a more affordable payment plan. 

Ahead of the autumn bill hikes, household energy debt is standing at an all-time high of £1.3 billion[1] – nearly three times higher than it was in September last year[2], according to new research from Uswitch.com, the comparison and switching service.

Six million homes – almost a quarter of households (23%) – owe an average of £206 to their energy provider this summer[1], a 10% increase in just four months from April, where the average debt was £188. This would traditionally be a time of year when bill-payers would expect to have built up a war chest to cope with winter bills. 

On 26th August Ofgem will announce the new level of the price cap, which is predicted to rise from £1,971 to £3,358[5] and result in energy bills rocketing this winter.

Another eight million bill-payers have no credit balances, meaning 14 million households have no protection from hardship this winter[3]. 

Graph: UK energy debt since October 2018

Almost a fifth of bill-payers (18%) are worried about their supplier forcing them onto a prepayment meter this winter due to their debt. Nearly two in five (38%) consumers didn’t know this was something their provider could do[6].

Justina Miltienyte, head of policy at Uswitch.com, said: “Energy debt has hit an all-time high with the worst possible timing, turning this winter’s energy price hike into a deeply precarious situation for many households. 

“Our data shows that while a similar proportion of people are in debt as in April - people now owe approximately 10% more than just four months ago to their energy suppliers. This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter. 

“This also suggests the cost-of-living crisis is already squeezing budgets dramatically, even during the summer months, as families struggle with rising bills in all areas.

“If you are behind on your bill payments, or your energy account is going into debt, speak to your provider as soon as possible. They should be able to help you find a solution, such as working out a more affordable payment plan. You may also find you are eligible for additional support such as hardship funds and other energy help schemes.” 

“The Government also needs to take energy debt seriously ahead of the winter - and a greater support package for vulnerable households needs to be agreed as a priority”. 

Find out if you’re eligible for an energy help scheme, grant or benefit here

For further information, please contact:

Prisca Simango, Uswitch.com on 07971 093 512 / a-prisca.simango@rvu.co.uk 

Sarah Robinson, Rhizome Media on 07545 895 404 / sarah@rhizomemediagroup.com

Notes

Research conducted online by Opinium, 19th to 22nd July 2022, among 2,000 UK adults, weighted to be politically and nationally representative.

1. Respondents were asked ‘Thinking about your most recent energy bill/statement from your supplier, which of the following best applies to you?’ 23% said they were in debt to their supplier. 23% of 28.1 million UK households = 6.4 million households in energy debt. The average amount of energy debt was £206. £206 X 6.4 million = £1.3 billion. This is the highest figure since Uswitch started recording data in 2013.

2. See table for historic household energy debt since 2018.

3. Respondents were asked ‘Thinking about your most recent energy bill/statement from your supplier, which of the following best applies to you?’ 29% said they were even. 29% of 28.1 million UK households = 8.15 million households in neither energy debt nor credit. 8.15 million + 6.4 million = 14.55 million with no credit balance.

4. Respondents were asked ‘Thinking about how you are planning for the higher energy bills this autumn, which of the following statements most closely matches your situation?’ 55% of prepayment meter customers said ‘I’m feeling anxious - I’m already struggling to pay my bills’. 6% said ‘I’m extremely anxious as I’ve already missed several payments’.

5. Cornwall Insight: Price cap to remain significantly above £3,000 a year until at least 2024

6. Respondents were asked ‘Are you worried that your supplier will force you onto a prepayment meter this winter?’ 18% said ‘Yes’. 38% said ‘No - I didn’t know suppliers could force you to get a prepayment meter.’

About Uswitch - saving you money for 20 years

Uswitch is the UK’s top comparison website for home services switching. We’ve saved consumers £2.5 billion off their energy bills since we launched in September 2000, and also help people find a better deal on their broadband, mobile and TV.

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.

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FOR MORE INFORMATION

Prisca Simango
Phone: 07971 093 512
Email: prisca.simango@rvu.co.uk
Twitter: @UswitchPR

About Uswitch - saving you money for 20 years

Uswitch is the UK’s top comparison website for home services switching. We’ve saved consumers £2.5 billion off their energy bills since we launched in September 2000, and also help people find a better deal on their broadband, mobile and TV.

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.