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Millions of householders enter winter in debt to energy firm

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08/10/2020
Almost three million householders will enter the winter months in debt to their energy supplier.

The average amount of debt stands at £68.20 and half a million more people owe their energy firm money compared to last year.

However, the research from comparison and switching site Uswitch, revealed that £188m is owed, which is actually £79m less than last year.

But, it comes at a time when energy accounts should usually be in credit after the warmer summer months.

Of those in debt, 65% said the amount they owe their supplier is the same or higher than what they owed last year. Just 13% said they owed less money than last year.

Around 9.6 million households are worried about how they’ll pay their bills, with 14% saying they won’t put the heating on even if it’s cold. For 8%, they said they’ll spend more time out of their homes in a bid to avoid heating it.

For nearly two million, they said they will need to spend less money on food in order to pay the gas and electricity bills.

The Uswitch study also found that energy companies are still not proactively contacting all customers when they slip into the red.

More than half of households in arrears (54%) said their supplier had not contacted them about the debt. Just a fifth (22%) were contacted by their supplier, who either helped organise a repayment plan or provided advice on using less energy.

Switching when in debt

Credit meter customers need to clear any debt before switching their provider unless it is less than 28 days old, in which case it will be added to the final bill. If the debt can’t be paid off in one go, switching to the supplier’s cheapest deal will help bring costs down.

Prepayment meter customers in debt of less than £500 per fuel can usually switch suppliers, but should still organise a manageable repayment plan, Uswitch said.

However, for many households in the most difficult situations, switching alone won’t be enough to solve the problem. Debt charities such as StepChange provide guidance for people experiencing financial difficulties. National Energy Action also offers advice on energy bills and keeping warm at home.

Sarah Broomfield, energy expert at Uswitch.com, said: “It’s incredibly worrying that so many more homes have found themselves in energy debt as we head towards the coldest time of the year.

“It’s also alarming that nearly two million households will be forced to choose between heating or eating just to make ends meet.

“It’s clear that there’s room for energy companies to do more to make customers aware if they are falling behind on their bills, and lay out the options or help available for paying off that debt.

“Anyone who is worried about their debt should contact their energy supplier as soon as possible to set up a repayment plan. They can also ask for energy savings advice and check if they are eligible for free insulation grants, such as the newly launched Green Homes Grant, to help keep costs down longer term.”

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