Nearly three million households will enter winter in debt with their energy supplier, new research claims.
Some 2.8million homes owe money to their provider according to data from Uswitch, with households collectively owing £188million, meaning an average debt of £68 each.
Almost half a million more homes than last year are entering the coldest time of year in debt.
But despite this, the total amount owed is believed to be £79million less than last year. It means that while more households are in debt, it is for far smaller amounts compared to 2019.
Nearly three million homes will enter winter in debt to their energy supply, Uswitch data says
Usually, homes will have built up credit with their supplier during the summer months when they use their heating less.
As such, during the winter months, when using more energy, they use the credit to avoid going into debit.
However, the mounting debt is likely due to the lockdown period meaning most were working from home and increasing energy usage.
As a result of the bill increase, 1.9million plan to cut back on their food spending in order to stay warm over the colder months whiet 9.6million worry about how they are going to pay their bills this winter.
Of those in debt, 65 per cent say the amount they owe their supplier is the same or higher than what they owed last year, while only 13 per cent said they owed less money than last year.
Meanwhile, 14 per cent of bill-payers are planning not to put their heating on even when it’s cold, and 8 per cent say they are going to try to spend more time out of the house to avoid heating.
A number of people have said they are going to cut down on their energy usage to save money
Separate research from Uswitch’s winter energy debt study found that 37 per cent of households are planning to wear more layers of clothing so they can avoid putting the heating on this year, while 31 per cent are planning to switch more appliances off.
Some 26 per cent are also planning to turn their thermostat down.
The study also found that energy companies are still not proactively contacting all customers when they slip into the red.
More than half of households – 54 per cent – in arrears said their supplier had not contacted them about the debt whilst just 22 per cent were contacted directly.
The suppliers who did contact customers either helped organise a repayment plan or provided advice on using less energy.
In order to save money, households are encouraged to use price comparison services to see if they could cut costs by switching to another supplier – or moving from a default to a fixed tariff which are traditionally more expensive.
|Supplier||Plan||Type||End date||Green||Exit fee||Average price|
|Avro Energy||Simple and SuperConnect||fixed||12m||N||0||831.58|
|Utility Point||Just Join UP 12M Fixed Wk40||fixed||12m||N||72||865.91|
|E.ON||Fix Online Exclusive v50||fixed||12m||Y||60||873.21|
|Shell Energy||Energy January 2022 v2||fixed||31/01/2022||Y||60||873.57|
|Green Network Energy||GNE Summer Sizzler V9||fixed||12m||N||50||876.49|
|Green Star Energy||Fix for Less 12m v8||fixed||12m||Y||60||888.69|
|Outfox the Market||Fix’D 20 15.0||fixed||12m||Y||0||889.09|
|OVO Energy||Better Smart||fixed||12m||Y||60||891.22|
|Source: Uswitch (prices correct as of 7 October 2020)|
Credit meter customers will need to clear any debt before switching their provider unless it is less than 28 days old, in which case it will be added to the final bill.
If the debt cannot be paid off in one go, switching to the supplier’s cheapest deal will help bring costs down.
Prepayment meter customers in debt of less than £500 per fuel can usually switch suppliers, but should still organise a manageable repayment plan.
Debt charities can also help those who are struggling. StepChange provide guidance for people experiencing financial difficulties whilst National Energy Action also offers advice on energy bills and keeping warm at home.
There is also extra help available for vulnerable consumers through schemes like the Winter Fuel Payment, Cold Weather Payment, and Warm Home Discount.
Sarah Broomfield, energy expert at Uswitch, said: ‘It’s incredibly worrying that so many more homes have found themselves in energy debt as we head towards the coldest time of the year.
‘It’s also alarming that nearly two million households will be forced to choose between heating or eating just to make ends meet.
‘It’s clear that there’s room for energy companies to do more to make customers aware if they are falling behind on their bills, and lay out the options or help available for paying off that debt.
‘Anyone who is worried about their debt should contact their energy supplier as soon as possible to set up a repayment plan.
‘They can also ask for energy savings advice and check if they are eligible for free insulation grants, such as the newly launched Green Homes Grant, to help keep costs down longer term.
The research was conducted in September 2020 among 2,000 adults responsible for their energy bills.
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