Consumers owe £624 million to energy providers

Flouescent bulb

Consumers are over £624 million in debt to energy providers, research has revealed.

The survey by uSwitch found five million households (19%) are in the red when it comes to energy bills. It claims consumers now owe an average £126 each to energy suppliers.

While 23% of those in debt say they intend to pay it off by lump sum and 42% plan to increase their direct debit, worryingly nearly a quarter (22%) say they won't be doing anything about it, hoping it will go down naturally over time.

How I cut my energy bills in half

The bitter winters the UK has experienced lately and the spiralling costs of energy have been blamed for the debt crisis.

British Gas, Scottish Power, Scottish and Southern Energy, Npower, E-ON and EDF have all hiked prices in recent months.

Ann Robinson, director of Consumer Policy at says consumers are still struggling to cope with previous rises and the new increases are "concerning".

"Consumers were knocked for six by the 41% or £334 increase in energy prices in 2008 and have been struggling to find their feet ever since," she says. "With prices now increasing by an average of 5.9% or £63, that struggle is about to become a lot harder."

Robinson says with households typically paying £1,132 a year for their energy, debt is symptomatic of the high cost of energy today.

"Households will have to adapt if they are to protect themselves and there are two key steps to this - make sure you are paying the lowest possible price for your energy and cut down on the amount of energy you use" she adds.

Check out the Moneywise Energy Switcher to see if you could save money on your utility provider:

Your Comments

If you are one of the 5m + households in fuel poverty ask your supplier if you qualify for their social tariff. For instance, if you can get the “essentials” tariff from British Gas, you will be charged at their cheapest tariff – for prepayment meter customers this represents a useful saving (c15-20%).

Prepayment meter customers may be better off with Ebico (0800 458 7689) – a not for profit supplier which charges the same tariff regardless of payment method.

The Energy Savings Trust (0800 512 012) can advise on insulation grants. Your energy supplier may also have insulation offers.

For households in fuel debt, your local CAB (if it survives the funding cuts! – see the Justice for All website) can help you negotiate more affordable repayment of fuel debt.

Customers of EDF, British Gas & npower will have access to their Trust Funds.
These Trust Funds may be able to help customer clear fuel arrears. The grant application can be found on their websites, or tel 01733 421060, or your CAB can assist.
Turn 2 us is a useful website listing charitable help, some charities will specifically help with fuel debt.

Some details on Social Tariffs

These reduced cost schemes are provided by the energy companies for some customers over 60, or receiving benefits such as Pension Credit (PC), Income Support (IS), and Housing Benefit (HB), Council tax benefit (CTB), Disability Living Allowance (DLA), Attendance Allowance (AA), or spending more than 10% of household income on energy.

Scottish & Southern Electric - Energy Plus Care
For all customers spending more than 10% of household income (including housing benefit and council tax benefit but excluding DLA /AA) on energy this tariff gives an annual rebate (payable in April 2011) of £50 per fuel. Customers spending more than 15% will get an annual rebate of £100 per fuel. Customers spending more than 20% will be offered a discounted tariff and additional help. Apply by phone 0800 622 838

EDF Energy - Energy Assist
For customers spending more than 10% of household income (including DLA, HB, & CTB) on energy, or receiving Pension Credit or Income support this tariff could give customers the same tariff as Direct Debit customers and an annual discount of £75 for dual fuel (£37.5 single fuel). Apply by phone 0800 269 450. (Not available to customers with online tariffs or gas only).

N Power
Spreading warmth tariff
Available for households with a gross income under £13,500 who have a household member receiving a pension, or who has a disability, or with a child under 16. Average savings of 20% for cheque/cash & Prepayment meters.
Application can be made through the CAB or phone 0800 975 1373.

Scottish Power - Fresh Start
Get Scottish Power’s cheapest available tariff, regardless of payment method. Available to customers over 60 and in receipt of means-tested benefit / AA/ DLA.
Apply by phone 0845 2700 700 or 0141 568 6182

British Gas - Essentials
To be eligible consumers must have a household income of less than £15,000 per year (including DLA,AA, HB, & CTB ) and must be either receiving DLA/AA, or be over 70 on pensions credit, or suffer from a terminal illness. In addition customers must get a means tested benefit (i.e. IS,PC,HB). The tariff will be British Gas' lowest. Apply by phone on 0800 072 7100 or 0800 072 8625. Prepayment customers can ring 0800 294 8604.

E.ON - E.On Warmassist
Offers a 15% discount on standard fuel prices, & energy efficiency help. To qualify there must be no more than 2 people in the household, both over 60 and in receipt of Pension Credit or DLA or AA. In addition you have to have been an e.on customer for at least 1 year. Apply by phone 0800 404 6287.

Surely we should all be in debt to the energy providers? I do not pay for a meal before I eat in a restaurant, even at a fast food drive through one pays on receipt of the food...
It's a big con! The energy poviders are earning interest on our money most of the year. It is only at the end of winter that most people are in debt for a short while.

Related articles