Warning for consumers as ‘household energy debt hits five-year high’

Average household energy debt is now £216, according to a survey for Uswitch, up from £190

More than 9 million households have no energy credit going into winter, according to the survey (PA)

Household energy debt has hit a five-year high – even before the more expensive months of the year.

A new survey revealed that average household energy debt is £216, up 13 per cent compared with the figure of £190 seen this time last year.

The poll, for comparison site Uswitch, found that the number of homes that owe money to their supplier has risen from 2,800,000 to 3,200,000, a hike of 11 per cent.

More than 9 million households have no energy credit going into winter, according to the survey.

Richard Neudegg, director of regulation at Uswitch, said: “Building up a war chest of around two months of energy credit is important as we head into winter, and it’s worrying that more than 9 million households have no buffer against the coldest months.

“Average household energy debt for autumn is at the highest level we’ve seen in more than five years. And with the price cap changing every three months, households are facing even more uncertainty this year, as prices are expected to rise again in January.

“If your energy account is going into debt or you are behind on your bill payments, speak to your provider as soon as possible. They should be able to help you find a solution, such as working out a more affordable payment plan. You may also find you are eligible for additional support, such as hardship funds and other energy help schemes.”

Last week, Britain’s energy watchdog, Ofgem, said it was launching a consultation on options to protect the energy market, after figures in the summer showed that debt had reached a record £2.6bn due to soaring wholesale prices and cost-of-living pressures on households.

The watchdog announced it was considering a one-off increase to the energy price cap in an effort to prevent suppliers from going bust as they face spiralling consumer debts. The proposed increase could see households pay up to £17 a year more – or £1.50 a month – on average, “to reduce the risk of energy firms going bust or leaving the market as a result of unrecoverable debt”.

The poll for Uswitch, which surveyed 2,000 energy bill payers between 26 September and 2 October, also found:

• Two-fifths of those in arrears (40 per cent) say their debt is higher than last year, and more than a quarter (28 per cent) believe their position is about the same as 12 months ago.
• Almost one in seven (14 per cent) say they have moved from being in credit a year ago to being in debt now.
• More than half of households (53 per cent) are worried about how they will pay their energy bills this winter, with just a quarter (25 per cent) saying they are unconcerned.
• Almost a fifth (18 per cent) plan to pay off the debt in one lump sum, a quarter (25 per cent) will increase their direct debit, and one in seven (13 per cent) hope to agree on a repayment plan with their provider.
• A tenth of households (9 per cent) say they cannot afford to pay off their arrears.
• Nearly half (49 per cent) say they will wear extra layers at home so they can keep the heating at a lower level, while one in four (25 per cent) say they will not be turning on the heating even when it is cold.
• The poll also found that almost three-fifths of households (59 per cent) have built up a credit balance ahead of winter, at an average of £236 – down slightly from £249 last autumn.