Number of households in debt to energy suppliers rises 11% to surpass 3 MILLION ahead of winter

According to research, the number of households with energy debt has increased to more than 3 million, with those under 55 years of age being the most affected.

The average household energy debt has risen 13 per cent to £216, and the number of households already in arrears is up 11 per cent on last year, according to research by comparison website Uswitch.

The number of households indebted to their energy supplier has increased from 2.8 million to 3.2 million in one year.

The largest amount of debt is held by people aged 18-34, who have an average debt of £236.78, followed closely by those aged 35-54 with arrears of £234.48.

Only eight per cent of people aged 55 and over are in debt to their energy supplier, with the average amount owed being £161.13.

Households have been warned that their energy bills may rise again this winter, despite a drop in Ofgem’s energy price cap this month, due to a lack of Government support.

This Is Money analysis found customers could pay up to £100 more this year, and hundreds more than before the pandemic, especially those in smaller homes that consume less energy.

Two-fifths of households with arrears on their energy bills, surveyed by Uswitch, say their debt is already higher than last year.

Meanwhile, 28 per cent believe their position is the same as it was 12 months ago.

The most worrying thing is that one in seven households say they have gone from having credit to being in debt in one year.

Energy experts often recommend that households build up credit in the warmer months to protect them from huge winter bills.

Almost three-fifths of households have built up a credit balance before winter, with average credit standing at £236, down slightly from £249 last year.

People aged 55 and over are in a better position, having built up an average credit of £261.24, followed by those aged 35 to 54 with £235.94. People aged 18-34 typically have around £193.93 in credit.

However, Uswitch research also found that more than 9 million households have not built up any credit.

Richard Neudegg, regulatory director at Uswitch, said: “Building up a war chest of around two months of energy credit is important as we approach winter, and it is worrying that more than nine million homes have no protection against the colder months.”

«The average household energy debt in autumn is at the highest level we have seen in more than five years. And with the price cap changing every three months, households face even greater uncertainty this year as prices are expected to rise again in January.’

For those in energy debt, many do not have a plan for how to improve their situation, and 23 percent hope the problem will go away over time.

Almost a fifth plan to pay the debt in one go, a quarter plan to increase their direct debit and 13 per cent hope to agree a payment plan. One in ten say they can’t afford to pay off their debt.

What to do if you are behind on your energy bills

If you are having difficulty paying your energy bills or are worried about not being able to make a payment, you should speak to your energy company.

Many have dedicated teams to help you and can work out payment plans for large bills.

Neudegg said: ‘If your energy account is running into debt or you are behind on your bills, speak to your supplier 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 be eligible for additional support such as hardship funds and other energy support schemes.