Household energy debt hits five-year high of £216 ahead of winter.. as number in arrears rises 11%
Average household energy debt has risen 13% to £216 among those already owing money to their provider ahead of winter[1]
Over three million households are in debt to their supplier – up 11% on this time last year[1]
More than nine million households have no credit at all at a time of year when they should usually have built up funds to cope with winter bills[1]
More than half of households (53%) are worried about paying their energy bills this winter[2], and a quarter (25%) won’t put the heating on to save cash[3]
A quarter of households in energy debt (23%) hope that their deficit will go down over time, while one in ten (9%) say they can’t afford to pay it off[4]
Nearly three fifths of homes (59%) have a credit balance, with the average pot standing at £236 – down slightly from £249 last autumn[1]
Uswitch is urging households who can’t keep up with energy bills to contact their suppliers and request a more affordable payment plan.
Household energy debt has hit a five-year high of £216 ahead of the winter, with the number of homes already owing money to their provider up 11% on last year[1], reveals new research from Uswitch.com, the comparison and switching service.
The average household debt is up 13% on the £190 figure seen at this time last year, and the number of homes that owe money to their supplier has risen from 2,800,000 to 3,200,000[1].
More than nine million households have no energy credit going into winter – the time of year when homes use the most power[1]. Typically, customers should build up energy credit during the summer so they have a war chest to rely on for the coldest months.
Two fifths of those in arrears (40%) say their debt is higher than last year, and a quarter (28%) believe their position is about the same as 12 months ago. Nearly one in seven (14%) say they have moved from being in credit a year ago to being in debt now[5].
More than half of households (53%) are worried about how they will pay their energy bills this winter, with only a quarter (25%) saying they are unconcerned[2].
Many of those in energy debt have no plan for how they will improve their situation, with nearly a quarter (23%) just hoping that the problem will go away over time[2].
Almost a fifth (18%) plan to pay off the debt in one lump sum, a quarter (25%) will increase their direct debit, and one in seven (13%) hope to agree a repayment plan with their provider. Worryingly, one in ten (9%) say they can’t afford to pay off their arrears[4].
With the cold winter months approaching, many households are planning drastic measures to reduce their energy bills. Nearly half (49%) say they will wear extra layers at home so they can keep the heating at a lower level, while one in four (25%) say they won’t put on the heating, even when it’s cold[3].
Nearly three fifths of households (59%) have built up a credit balance ahead of winter. The average credit is £236 – down slightly from £249 last autumn[1].
Uswitch.com is urging households who can’t keep up with energy bills to contact their suppliers and request a more affordable payment plan.
Richard Neudegg, director of regulation at Uswitch.com, said: “Building up a war chest of around two months of energy credit is important as we head into winter, and it’s worrying that more than nine million households have no buffer against the coldest months.
“Average household energy debt for autumn is at the highest level we’ve seen in more than five years. And with the price cap changing every three months - households are facing even more uncertainty this year as prices are expected to rise again in January.
“If your energy account is going into debt or you are behind on your bill payments, 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.”
Find out how to save on your household bills here.
Research conducted online by Opinium, 26th September to 2nd October 2023, among 2,000 UK energy bill-payers, weighted to be 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?’ 1178 respondents were in credit. 1178 / 2000 = 58.9% of households are in credit. 58.9% of 28.1 million UK households = 16.6 million households. Average credit was £236.41. 229 respondents were in debt. 229 / 2000 = 11.4% of households are in debt. 11.4% of 28.1 million UK households = 3.2 million households. Average debt was £215.72. 419 respondents were neither in debt nor in credit. 419 / 2000 = 20.95% of households are even. 20.95% of 28.1 million UK households = 5.9 million households. Total number without any credit = 5.9 million + 3.2 million = 9.1 million households.
2. Respondents were asked ‘How worried are you about paying for your energy bill this winter?’ 53% answered ‘very worried’ or ‘a little worried’. 25% answered ‘not worried’ or ‘not worried at all’.
3. Respondents were asked ‘Are you planning to do any of the following to keep your energy bills down this winter?’ 49% replied ‘Wear more layers to avoid putting the heating on’. 25% replied ‘Not put the heating on even when it’s cold’. 37% replied ‘Turn my thermostat down’.
4. Respondents were asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how are you going to pay it off?’ 25% said ‘By increasing my monthly direct debit.’ 23% said ‘I’m hoping it will go down naturally over time’. 18% said ‘By paying it off in one lump sum’. 13% said ‘By agreeing a repayment plan with my energy supplier’. 9% said ‘I can’t afford to pay it off.’
5. Respondents were asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how does this compare with a year ago?’ 40% said ‘My debt/arrears are higher.’ 28% said ‘My debt/arrears are about the same.’ 14% said ‘I have moved from credit into debt.’
About Uswitch
Uswitch is one of the UK’s top comparison websites for home services switching, including energy, broadband and mobiles.
More people go to Uswitch to switch their energy, broadband and mobile than any other site, and we have saved consumers over £2.7 billion off their bills since we launched in September 2000.
Free mobile app Utrack also helps households manage their home energy usage and make potential savings.
Uswitch is part of RVU, a group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.