One in Five Households Owe Money to Energy Suppliers

April 12, 2013

Luke-Notley small (Custom)A new survey by price comparison website uSwitch has found that households in the UK owe approximately £637m to energy firms, which is £159m more than last year.

Ann Robinson, director of consumer policy at uSwitch.com, said the results of the survey were “a clear indication of the pressure people are coming under just to meet the cost of their basic bills”.

“The fact that a million more households have fallen behind in the last year so that over five million are now in debt to suppliers tells us everything we need to know about the impact of sky-high energy prices.”

Over 2,000 bill payers were surveyed by uSwitch and 1 in 5 of those reported that they were in debt to their energy supplier. 41% of those in debt reported that they owed more now than they did in April 2012, while only 9% said they owed less.

Robinson stated that the consequences for being in debt to energy suppliers were at worst a worry. “Direct–debit customers may see their monthly payment increase so that they pay the debt back over a period of time, while cash and cheque customers may need to negotiate a repayment plan with their supplier if they cannot afford to pay their bill in full,” she said.

In extreme cases of debt, a supplier can demand that a prepayment gas or electricity meter be fitted instead. A portion of the top-up would then be taken to pay off the existing bill.

Robinson said that consumers would only be disconnected if nothing else worked. “This only happens in the most extreme circumstances where all other options have failed. Ofgem works very closely with suppliers, monitoring the number of disconnections and ensuring that suppliers are doing everything possible to prevent a disconnection from taking place.

“The important thing for households is to try to keep a lid on their energy costs and there are two simple ways to do this,” she said. “Use less energy by making our homes far more energy efficient and by paying less for the energy that we do use by switching to the most competitive tariff for our needs.”

The study warned that the average energy debt could still rise due to record-breaking cold temperatures in March, combined with price rises over the winter.

If you are in arrears with a utilities provider our advice is to keep in contact with them and try to maintain your contracted monthly payment. They will normally accept repayment of the arrears over a structured period depending on your ability to pay.