Householders facing soaring energy debt

Household energy debt has risen by 24 per cent compared with this time last year while consumers owe £100 million more to their supplier than they did in 2016, a survey suggests.

Some three million UK household bill payers, or 11 per cent, currently owe an average of £134 or a collective £400m to their energy supplier at a time when – just as winter begins – they would expect to be in credit, according to the survey for uSwitch.

The collective debt is up by £75m on last year, while the number of households owing money has increased by more than 300,000 (12 per cent) since autumn last year, uSwitch said.

Looking further back, consumers owe their suppliers 36 per cent more than they did in 2016.

However, more than a third of bill payers (36 per cent) think they used less energy this summer than in 2017 and 41 per cent are already worrying about their energy bills ahead of winter, the poll suggests.

The higher levels of debt this year follow an unprecedented number of price hikes from large and small suppliers due to rising wholesale costs.

Since January, a total of 32 energy providers have announced 55 price rises, adding nearly £900m a year to domestic energy bills across the UK.

Ofgem announced in September that more than 11 million households will save a combined £1 billion a year under plans to cap rip-off gas and electricity tariffs at £1,136.

The regulator said each typical customer would save around £75 a year on average, with those on the most expensive default standard variable tariffs saving more than £120 a year when the cap comes into effect, hopefully by the end of the year. But uSwitch energy spokesman Rik Smith urged customers to switch, saying it could save them up to £482 a year, “much more than the government’s planned price cap can deliver”.

He said: “The soaring number of households in debt to their energy supplier is a clear indication of the pressure people are under just to make ends meet.

“After so many price rises this year, a lot of people may have received a price rise notification over the summer but not switched to a cheaper deal. Now is the time for consumers to take action, by making their homes more energy efficient or ensuring they don’t pay any more than they need to for the energy they use.

“For anyone struggling with their energy bills and worrying about keeping warm, there is help available.”