Household energy debt at 'five-year high with average arrears of £216' ahead of winter

October 16, 2023

There are now 3.2 million households in debt to their energy supplier with average arrears at a five-year high, according to a report.

Data from Uswitch.com showed an 11% rise in the number of customers who owe money to firms compared to the same period last year.

Its survey found that the average debt was £216 - up 13% on autumn 2022.

The price comparison service suggested more than nine million households had no energy credit going into winter - the time of year when homes tend to use the most gas and electricity.

Its findings were released as charities raise concerns over the winter ahead, given the removal of universal taxpayer support for energy bills and smaller sums for the most vulnerable.

The energy element of the cost of living crisis has eased since last winter but there are fears the conflict in the Middle East will combine with other factors to raise bills from January when the next price cap review takes effect.

Oil prices have climbed since June to stand at $90 a barrel while wholesale natural gas contracts for winter delivery surged last week.

October's figure stood at its highest level since February on Friday.

The growing level of arrears has prompted a warning that households could face a one-off charge of £17 a year to help prevent energy suppliers going bust.

The next price cap announcement, due in just over a month's time, is expected to see customers facing average annual bills back above the £2,000 level.

Richard Neudegg, director of regulation at Uswitch, said: "Building up a war chest of around two months of energy credit is important as we head into winter, and it's worrying that more than nine million households have no buffer against the coldest months.

Read more:
Energy bills may rise by £17 a year to stop suppliers going bust
Ban on forced installation of pre-payment meters extended

"Average household energy debt for autumn is at the highest level we've seen in more than five years and with the price cap changing every three months - households are facing even more uncertainty this year as prices are expected to rise again in January.

"If your energy account is going into debt or you are behind on your bill payments, speak to your provider 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 find you are eligible for additional support such as hardship funds and other energy help schemes."

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