Rising fuel bills push vulnerable into debt

MORE than 1.5 million energy customers are in debt to their utility companies as householders struggle to pay soaring bills, according to a new report.

New research from Consumer Focus and Citizens Advice has revealed a total of 850,000 electricity customers and more than 700,000 gas customers are now in debt to their energy supplier.

The figures increased by more than a quarter for electricity and a fifth for gas, between spring this year and the same period in 2010, according to the consumer bodies – reflecting a 21 per cent rise in the average energy bill to £1,273 a year.

The average amount by which customers are in debt to gas companies has also risen – by £14 to £320 – but the amount owed to electricity companies has dropped from £312 to £309.

The report came as Scottish ministers met with representatives of the Big Six energy companies to discuss measures to help customers struggling with their energy bills. Energy prices have rocketed even further since all of the major energy companies – which include SSE and ScottishPower – hiked their prices in recent months.

Representatives from fuel poverty and consumer groups, as well as Scottish Gas, EDF Energy, E.ON, npower, ScottishPower and SSE attended the meeting on Tuesday, where the utility companies agreed to help vulnerable customers transfer to their most cost-saving tariff.

As a result of the new research, Consumer Focus and Citizens Advice have launched a “Plug the Debt” campaign to help make struggling householders aware of what their rights are.

Last year 100,000 people across the UK went to Citizens Advice for help with fuel debt, and this year, in October alone, more than 12,500 people sought online advice on cutting their fuel bills from the Citizens Advice website.

Susan McPhee, head of social policy and public affairs for Citizens Advice Scotland, said: “The numbers of people coming to the Citizens Advice Bureaux for financial advice is rising all the time, and high fuel bills are always cited as a huge factor in these cases.

“One third of Scots are in fuel poverty, and CAB advisers regularly see people who say that they are literally shivering in their own homes, because they can’t afford to switch the heating on – or they are skipping meals in order to feed the meter. We think that’s completely unacceptable for Scotland in 2011, and both the government and the energy companies need to take whatever action is necessary to sort it.”

The groups believe that average energy price increases of 14 per cent this autumn could push even more vulnerable households into debt.

Norman Kerr, director of fuel poverty charity Energy Action Scotland, said: “The Plug the Debt initiative is a good move, as more people are now worrying about having a debt with their energy company; however, it is a pity that this campaign is necessary in the first place.

“We believe that the energy companies should be working to build better relations with and to support their customers, for example, by offering them an annual review of their tariff and payment method to ensure that they are getting the best deal.”