By Nicholas Earl
Household energy debt is standing at an all-time high of £1.3bn ahead of expected bill hikes this autumn, according to new research from Uswitch, the comparison and switching service.
This is nearly three times higher than it was in September last year.
Six million homes – almost a quarter of households (23 per cent) – owe an average of £206 to their energy provider this summer, which is a 10 per cent increase in just four months from April, when the average debt was £188.
Traditionally, this would be a time of year when bill-payers would expect to have built up a war chest to cope with winter bills, making the debts more alarming.
Ofgem will announce the new level of the price cap on August 26, which is predicted to rise from £1,971 to £3,582 this October, according to Cornwall Insight, and peak at £4,400 next year.
Uswitch noted that another eight million bill-payers have no credit balances, meaning overall 14m households have no protection from hardship this winter.
Meanwhile, a fifth of bill-payers (18 per cent) are worried about their supplier forcing them onto a prepayment meter this winter due to their debt, while two in five (38 per cent) consumers didn’t know this was something their provider could do.
Justina Miltienyte, head of policy at Uswitch.com, said: “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. The Government 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.”
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