UK energy debt crisis deepens for millions ahead of price cap rise
Before the 13 per cent increase in the price cap since July, a third of UK adults owed money to energy companies or were worried about being left behind.
The survey, conducted for the End Fuel Poverty Coalition, found that this figure rises to 45 percent for parents with children under 18 and 35 percent for people with disabilities.
The average debt owed by those with energy debt to their energy supplier was £750. Worryingly, 13 per cent of those who owed money or were worried about defaulting on payments owed money to “someone who scared them”, and this rose to 24 per cent among those who already had debt.
Those in energy debt have taken desperate measures: 32 per cent have tried to use less energy by turning off the heating or taking shorter showers, 25 per cent have kept their homes in uncomfortable temperatures and 21 per cent have fallen behind on rent or mortgage payments. More than one in five (21 per cent) have skipped meals, while 18 per cent have turned to the food bank to cope with costs or debt.
The End Fuel Poverty Coalition said supplier support for struggling households was “mixed”, with 15 per cent of those in arrears being directed to a hardship fund and 15 per cent on a repayment plan, while 13 per cent had no contact with their supplier in the past 12 months.
Less than a fifth (18 per cent) of those in debt feel they are treated fairly by their supplier, and only 8 per cent are referred to debt advice.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, condemned the situation, saying: “These figures reveal the true cost of years of failure to fix energy debt caused by sharp rises in bills. Millions of people are indebted to energy companies or worried they will be left behind, yet price shock profiteers are making billions in profits.”
He added: “The figures show that this is an insolvency crisis, not a debt crisis. The few people with energy debt are also in high-income households. Instead, it is ordinary people who are skipping meals, going to food banks and, most worryingly, resorting to risky borrowing just to keep the lights on. The energy sector, which has caused this debt through profiteering, must be made to contribute to clearing this mountain of debt.”
Janine Michael, executive director of the Center for Sustainable Energy, echoed these concerns: “At the Center for Sustainable Energy, we talk to people every day who are struggling not because they can’t pay their energy bills, but because they can’t.”
He called: “The long-awaited energy debt relief plan must be brought forward urgently and people in debt need access to appropriate debt advice, not just a letter from their supplier. But debt relief is a solution in itself. The real solution is to reduce the amount of energy households use in the first place by making appropriate investments in energy efficiency and phasing out gas. Until we get this sorted, we’ll be having the same conversation next winter.”
2,000 British adults took part in the survey, conducted by Opinium between 29 May and 1 June. Of these, 9 percent were late in their payments to energy suppliers, and 22 percent (about 12 million people) expressed concern about non-payment of debt.
