Households across England, Wales and Scotland now owe a record £4.79bn in unpaid energy bills, regulator Ofgem has revealed. The total debt and arrears has risen by 15% in a year, with the newly-published figures covering January to March. For those without a repayment plan, average arrears stand at £1,876 for electricity and £1,623 for gas – more than double the amount owed by customers who have agreed a repayment plan.
The record debt comes as energy prices are set to rise for millions of households in July, driven by the increasing cost of gas. Ofgem data shows that receiving a bill every quarter rather than paying by monthly direct debit costs about £140 a year more. There are still around seven million customers on these so-called standard credit accounts.
“Energy debt in England, Wales and Scotland hits record £4.79bn, with average arrears over £1,800.”
Experts say there are options to cut bills, even though many feel they have already made every saving possible. Suppliers may write off some debt, provide payment plans, or help with the cost of white goods such as fridges and washing machines – but only if customers tell them they are in trouble. Around 22 million people – about 40% of billpayers – now have the certainty of fixed tariffs, where the cost per unit does not change for the term, usually a year. Options on the market are cheaper than the price cap level, though if international events cause prices to fall sharply, savings might not be so clear-cut.
With a record-breaking heatwave under way, experts say it is the perfect time to prepare homes for winter by blocking draughts, changing cooking habits, bleeding radiators and being more energy efficient. Short showers can also make a difference, with egg timers or four-minute songs to keep time.
Millions of pounds in benefits go unclaimed, particularly pension credit, which can help older people with financial support and act as a gateway to other benefits. Grants for energy efficiency improvements may also be available through schemes organised by local councils. Charities such as Citizens Advice can help people see if they can get assistance.
The record debt level raises questions about how many more households will struggle when the July price rise takes effect.