More than nine million households in the UK are entering winter either in debt to their energy suppliers or without any account credit, according to a survey by Uswitch. About 40% of these households report feeling more anxious about paying for energy compared to last year. Only 55% of billpayers are currently in credit, down from 64% in 2022. Among those in credit, just 29% have saved £300 or more. The typical billpayer holds between £51 and £100.
Key Details
The survey shows that around 3.4 million households, nearly one in eight, are in debt to their energy supplier. They owe an estimated £750 million, which averages to £220 each. Of those in debt, 65% report that their supplier has contacted them about their balance. However, only 12% have received help in setting up a repayment plan. Ofgem’s energy price cap rose by 3.6% to £1,723 for a typical household on October 1. Forecasts predict an additional rise of about 22% in January.
Background
Ben Gallizzi, an energy spokesman at Uswitch, said, "Credit is the cushion that turns a frightening winter bill into a manageable one, but for millions, building a summer buffer for the winter simply hasn’t happened." He advised consumers to talk with their suppliers early if they are behind on payments and to ask about available support options. The survey also found that 43% of billpayers plan to wear extra clothing instead of turning on the heating. Additionally, 8% intend to cut back on food expenses to manage energy costs.
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Rising energy costs are likely to increase financial strain on consumers. This may affect spending in other sectors such as retail and food. Investors will watch for the upcoming government budget announcement, which may address energy support measures for households.
Based on reporting by: independent.co.uk, standard.co.uk