Household energy debt hits five-year high of £216 ahead of winter, poll suggests

Household energy debt has hit a five-year high of £216 ahead of the winter, with the number of homes already owing money to their provider up 11% on last year, according to a survey.

The average household debt is up 13% on the £190 seen at this time last year, while the number of homes that owe money to their supplier has risen from 2,800,000 to 3,200,000, a poll for comparison site Uswitch found.

More than nine million households have no energy credit going into winter when they should ideally have built up a balance to cover the higher costs of heating over the colder months, the survey suggests.

Two-fifths of those in arrears (40%) say their debt is higher than last year, and a quarter (28%) believe their position is about the same as 12 months ago.

Almost one in seven (14%) say they have moved from being in credit a year ago to being in debt now.

More than half of households (53%) are worried about how they will pay their energy bills this winter, with just a quarter (25%) saying they are unconcerned.

Almost a fifth (18%) plan to pay off the debt in one lump sum, a quarter (25%) will increase their direct debit, and one in seven (13%) hope to agree on a repayment plan with their provider.

A tenth of households (9%) say they cannot afford to pay off their arrears.

Nearly half (49%) say they will wear extra layers at home so they can keep the heating at a lower level, while one in four (25%) say they will not be turning on the heating, even when it is cold.

The poll also found that almost three-fifths of households (59%) have built up a credit balance ahead of winter, at an average of £236 – down slightly from £249 last autumn.

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.

“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.”

Last week Britain’s energy watchdog announced it was considering a one-off increase to the energy price cap of up to £17 a year to help prevent suppliers from going bust as they face spiralling consumer debts.

Ofgem said it was launching a consultation on options to protect the energy market after figures in the summer showed that debt reached a record £2.6 billion due to soaring wholesale prices and cost-of-living pressures on households.

The watchdog said it was considering a one-off increase in the price cap that could see households pay up to £17 a year more – or £1.50 a month – on average “to reduce the risk of energy firms going bust or leaving the market as a result of unrecoverable debt”.

Opinium surveyed 2,000 energy bill payers between September 26 and October 2.