Your cookie preferences

We use cookies and similar technologies. You can use the settings below to accept all cookies (which we recommend to give you the best experience) or to enable specific categories of cookies as explained below. Find out more by reading our Cookie Policy.

Select cookie preferences

Skip to main content

Popular Search Terms

Three in ten low-income households have no energy credit ahead of winter

Uswitch author headshot
Written by Uswitch
Updated on 16 October 2024
Share
  • More than five million low-income households have no energy credit at a time of year when it’s good to have built up funds to cope with higher winter bills[1]
  • One in ten homes (11%) with a household income below £20,000 a year[2] already owe money to their provider ahead of winter, owing £163 on average[1]
  • Overall UK household energy debt is down 17% compared with last year, with two million homes owing £179 on average to their provider ahead of winter[1]
  • A third of those in debt (32%) say their arrears are higher than last year, and one in ten (12%) say they have moved from credit to debt[3] 
  • Two-fifths of households (43%) are more worried about paying their energy bill than they were last year[4]
  • Nearly three-fifths of UK households (59%) have a credit balance, with the average pot standing at £220 – down slightly from £236 last autumn[1]
  • Uswitch has relaunched its eligibility guide to help households see what support schemes they may be entitled to
  • Uswitch is also calling on the Government to consider additional support for vulnerable consumers this winter, targeted at those most in need.

More than five million low-income households have no energy credit at a time of year when it’s important to have built up funds to cope with higher winter bills[1], according to new research from Uswitch.com, the comparison and switching service. 

One in ten homes (11%) with a household income of less than £20,000 a year[2] already owe money to their energy supplier ahead of winter, with indebted homes owing £163 on average[1].

Typically, customers should build up energy credit during the summer so they have a cushion to help them get through the coldest months.

The nationwide picture is more positive, with only 8% of households – 2,400,000 – in energy debt going into winter, compared with more than 11% – or 3,200,000 – last year[1]

Households’ energy bills have dropped considerably over the last two years, with the energy default tariff falling from £2,500 for average annual consumption in January 2023 to £1,568 in July this year[5], before rising 10% in October 2024 to £1,717. But bills still remain high compared with before the energy crisis, with the cost-of-living crisis adding pressure to household budgets on multiple fronts. 

The average energy debt per household is £179, down 17% from last year’s figure of £216. However, the average household energy account balance is £128 – the lowest level in three years[1].

Nearly three-fifths of UK households (59%) have a credit balance, with the average pot standing at £220 – down slightly from £236 last autumn[1]. Overall, nine million households have no energy credit going into winter, a slight reduction in the number from last year.

Despite the overall situation improving for the majority, a third of those in debt (32%) say their arrears are higher than last year, and one in ten households (12%) say they have moved from credit to debt[3]

Across the nation, two-fifths of households (43%) are more worried about paying their energy bill this year than they were last year[4]

Ahead of the Autumn Budget on 30 October, Uswitch is today calling on the Government to consider what more can be done to protect vulnerable consumers this winter.

Table: Government support schemes

Energy help scheme nameWho can get it?Which nation(s) does it apply to?How much discount could I get?
Warm Home DiscountThose who receive certain means-tested benefitsEngland, Scotland and Wales£150
Cold Weather PaymentThose who receive Pension Credit and don't live in a care home, and those on certain benefitsEngland and Wales£25 for each seven-day period of very cold weather between 1 November and 31 March
Winter Fuel PaymentThose over state pension age who also receive certain benefitsEngland and ScotlandEither £200 or £300
Child Winter Heating PaymentChildren under 19 who receive certain disability benefitsScotland£251.50
Winter Heating PaymentLow-income householdsScotland£58.75

Source: Uswitch.com


Uswitch.com has relaunched its eligibility guide to help households see what support schemes they might be entitled to. Customers struggling with their energy bills are also encouraged to contact their supplier who will have a hardship fund, which could cancel some or all of the customer’s energy debt. 

Richard Neudegg, director of regulation at Uswitch.com, said: “Households use more energy over the winter, so for the majority paying via direct debit it’s ideal to have a cushion of about two months’ worth of energy credit at this point in the year.

“It’s worrying that five million of the lowest-income households are going into winter with no buffer against higher bills. 

“If your energy account is going into debt or you are behind on your bill payments, speak to your supplier as soon as possible. Our eligibility guide is a quick and easy way to see if you might be entitled to additional support such as hardship funds and other energy help schemes.

“While it’s important that vulnerable customers can access the help already out there, we urge the Government to consider what more could be done for those most in need.” 

Use our eligibility guide to see if you’re entitled to energy bill support.

For more information

Beverley Noble | Energy PR Manager

beverley.noble@rvu.co.uk

Twitter: @UswitchPR

Notes

Research conducted online by Opinium, 1st to 7th October 2024, 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?’ Of 353 respondents whose household income was less than £20,000, 221 were in credit, 76 were even, and 40 were in debt. 40 + 76 = 116 respondents with no energy credit. 116 / 353 = 33%. Average balance was £107. Nationally, 1185 out of 2,000 respondents were in credit. 1185 / 2000 = 59% of households are in credit. 59% of 28.4 million UK households = 16.8 million households. Average credit was £221.83. 169 respondents were in debt. 169 / 2000 = 8.5% of households are in debt. 8.5% of 28.4 million UK households = 2,399,800 households. Average debt was £176. 

2. The median household disposable income in the UK for the financial year ending (FYE) 2023 was £34,500, according to the ONS. A household is considered to be in relative low income if its income is below 60% of the median income for that year. 60% of £34,500 is £20,700.

3. Respondents were asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how does this compare with a year ago?’ 32% said ‘My debt/arrears are higher.’ 24% said ‘My debt/arrears are about the same.’ 12% said ‘I have moved from credit into debt.’ 

4. Respondents were asked ‘Are you any more or less worried about paying for your energy bills this winter compared to last year?’ 43% replied ‘More worried now.’ 

5. Standard variable price cap level for the average household. The Energy Price Cap Guarantee capped the January 2023 figure at £2,500.


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 find their energy, broadband and mobile deals 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.