Monday, 25 Nov 2024

Together we owe £1,300,000,000 on energy bills – and that's before they jump 80%

Millions of homes across the UK are already in debt to their energy provider, with households owing £1.3 billion two months before bills are set to soar by more than 80%.

The overall debt bill is already three times higher than it was a year ago, according to experts at Uswitch, and it seems likely it will grow further over the winter.

Six million homes owe an average of £206 to their energy provider, according to a survey from the company. In April the same average debt was £188.

Normally at this time of year, people have built up a small war chest to help even out the increased bills during the winter months.

Regulator Ofgem is expected to hike the price cap on energy bills to £3,582 per year for the average household in Great Britain from the beginning of October, according to a new forecast.

Analysts at Cornwall Insight predicted further rises, to £4,266 in January and then £4,427 from the start of April.

‘Energy debt has hit an all-time high with the worst possible timing, turning this winter’s energy price hike into a deeply precarious situation for many households,’ said Justina Miltienyte, head of policy at Uswitch.

‘This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter.’

On Tuesday, Martin Lewis called on Tory leadership candidates Rishi Sunak and Liz Truss to ‘stop ignoring this portentous national cataclysm’ and promise immediate help to those struggling.

It follows Tony Danker, director general of the Confederation of British Industry (CBI), saying on Tuesday that the Prime Minister and the two contenders to replace him should ‘come together to agree a common pledge to support people and help quell fears’.

The two contenders vying to be the next prime minister have faced growing calls to spell out how they would help with the energy price spike.

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Posting on Twitter, Mr Lewis said ‘the zombie government needs to wake up sooner than September 5′ – when Boris Johnson leaves and the new PM takes office.

Ms Truss branded proposals to agree support for rising energy bills with the Government and Mr Sunak before the Tory leadership contest is over as ‘bizarre’.

The front runner in the race to succeed Mr Johnson as prime minister made the comments as she and her opponent faced growing calls to spell out how they will deal with a spike in energy prices.

Mr Sunak meanwhile suggested he would not offer further cash payments to every household and would instead target support at the most vulnerable.

The Government has already promised £400 to every household and extra help for the more vulnerable.

The Uswitch survey showed that eight million households have no credit balances, meaning they have no cushion against the winter misery.

Nearly one in five people (18%) said they are worried about their supplier forcing them to take a prepayment meter if they fall behind on bills, although 38% said they did not know their supplier could do this.

‘If you are behind on your bill payments, or your energy account is going into debt, speak to your provider as soon as possible,’ Ms Miltienyte said.

‘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.

‘The Government also needs to take energy debt seriously ahead of the winter – and a greater support package for vulnerable households needs to be agreed as a priority.’

There are several ways for customers to save on bills. One of the simplest is to turn down the flow temperature on your condensing combi boiler.

Doing this will allow the boiler to run more efficiently and could save around £200 off an average energy bill.

Another easy saving is to turn off the pre-heat mode on the boiler, which could mean hot water taps taking longer to heat up, but could save hundreds of pounds a year.

Experts also advise households to check if they are eligible for extra support.

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