Five million customers in debt to energy suppliers

One in five households owe money to their supplier as the UK emerges from its coldest March on record.

A total of £637 million is owed overall in unpaid bills, up £159m on last year.

The average household owes £123 after falling behind on payments or due to disputes over estimated readings, consumer watchdog uSwitch.com has said.

A standard household energy bill is almost £100 more than 12 months ago, with customers paying an average £1353 a year. The cost has risen a staggering £831 since the start of 2004.

Ann Robinson, consumer policy director for uSwitch, said: “The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills.

“The fact that a million more households have fallen behind in the last year so that over five million are now in debt to suppliers, tells us everything we need to know about the impact of sky-high energy prices.”

The worrying slide into debt comes with Perth-based energy provider SSE hit with a £10.5m fine last week by regulator Ofgem for mis-selling gas and electricity.

The penalty was the largest ever imposed on an energy supplier by Ofgem. The mis-selling related to telephone, in-store and doorstep sales, Ofgem said.

The watchdog’s inquiry found that inaccurate and misleading information was being provided to customers by SSE about potential savings and on prices.

Investigations are also pending into Glasgow-based ScottishPower, E.ON and nPower, meaning further penalties could still be announced.

A separate supplier, EDF Energy, was fined £4.5m last month.

Ms Robinson has urged customers to move to the best deal or pay by direct debit to slash their bills.

She said: “Consumers should also make sure that they or their supplier are talking regular meter readings, as relying on estimated bills can be a shortcut to debt.”

Customers were either turning a “blind eye” to their mounting debt or were having to agree to painful repayment plans, according to the uSwitch report.

The price comparison site predicted in February that energy bills could more than double to an “unprecedented” £3000 a year by the end of the decade.

Leading suppliers have agreed to review the bills of their most vulnerable customers to help them secure the cheapest tariffs, despite not  having to do so.

Energy Action Scotland spokeswoman Elizabeth Gore said: “The bottom line is that gas and electricity prices have suddenly become an issue for a lot of people.”