UK households already owe £1.3bn to energy companies two months before bills are set to surge by more than 80%. The overall debt bill is already three times higher than it was a year ago, according to experts at Uswitch, and it seems likely it will grow further over the winter.
Six million homes across the UK owe an average of £206 to their energy provider, a survey by the company has revealed. In April, the same average debt was £188. Normally at this time of year people have built up credit to help even out the increased bills during the colder months.
Regulator Ofgem is expected to hike the price cap on energy bills to £3,582 per year for the average UK household from the beginning of October, according to a new forecast. Analysts at Cornwall Insight predicted further rises, to £4,266 in January and then £4,427 from the start of April.
“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,” said Justina Miltienyte, head of policy at Uswitch.
“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.”
The survey showed that eight million households have no credit balances, meaning they have no cushion against the winter misery. Nearly one in five people (18%) said they are worried about their supplier forcing them to take a prepayment meter if they fall behind on bills, although 38% said they did not know their supplier could do this.
“If you are behind on your bill payments, or your energy account is going into debt, speak to your provider as soon as possible,” Ms Miltienyte said.
“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.”
