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Millions of households in debt to energy suppliers

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22/04/2008

Research from uSwitch.com, the independent price comparison and switching service, reveals that 6.8 million households are ‘in the red’ to energy suppliers.

The average debt is £114, enough to prevent consumers from being able to switch suppliers. However, many more could fall into energy debt following recent price increases, as suppliers have to wait for their next account review before increasing customers’ Direct Debits and consumers are not taking action themselves.

Energy prices have gone up by around £136 per household since the beginning of the year and the average household energy bill now stands at £1,048. However, suppliers cannot automatically increase Direct Debits until they have reviewed the account. This is to ensure that customers are paying the correct amount and to avoid putting up people’s monthly payments unnecessarily.

Unfortunately though, it could leave many households underpaying until their account is reviewed.

Ann Robinson, director of consumer policy at uSwitch.com, said: “6.8 million households are in debt to energy suppliers and this issue has to be tackled now before it snowballs further.

“As well as the misery and uncertainty that debt can cause, owing money to an energy supplier can prevent consumers from being able to reduce household expenditure by moving to a lower cost energy deal. It is a barrier to switching and consumers cannot afford to have this option closed to them in today’s economic environment.

“Consumers have to take a more active role in managing energy bills – don’t just sit back and wait for your supplier to review your account. If you are near or already in the red and can afford to increase your payments, contact your supplier. Make sure you are paying the lowest possible price for your energy by shopping around, become more energy efficient and don’t get caught out by inaccurate billing – make sure you or your supplier is taking regular meter readings. Simply relying on estimated bills after a price rise could be a shortcut to debt.”

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