Experts at Uswitch have said that households already owe £1.3 billion to their energy suppliers two months before bills are set to soar by more than 80 per cent. New research by the comparison website suggests that the overall debt bill is already three times higher than it was a year ago and seems likely to grow further over the winter.
According to its latest survey, some six million homes across the UK owe an average of £206 to their energy provider, up slightly from April when the same average debt was £188. Normally during the warmer summer spell, people have built up a credit safety net to help them offset the increased bills during the colder months.
Regulator Ofgem is expected to hike the price cap on energy bills to £3,582 per year for the average household with typical usage from the start of October, according to a new forecast by Cornwall Insight.
The energy analysts also predict further rises, to £4,266 in January and then £4,427 from the start of April.
"Energy debt has hit an all-time high with the worst possible timing, turning this winter's energy price hike into a deeply precarious situation for many households," said Justina Miltienyte, head of policy at Uswitch.
"This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter."
The survey showed that eight million households have no credit balances, meaning they have no cushion against the winter price hike.
Nearly one in five people (18%) said they are worried about their supplier forcing them to take a prepayment meter if they fall behind on bills, although 38 per cent said they did not know their supplier could do this.
Uswitch strongly advises anyone behind on their energy bills, in danger of going into debt to speak to your provider as soon as possible.
Ms Miltienyte explained: “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.
"The UK Government also needs to take energy debt seriously ahead of the winter - and a greater support package for vulnerable households needs to be agreed as a priority."
It’s worth noting that if you have a disability which means a prepayment meter wouldn’t suit you, your energy supplier should agree a repayment plan instead.
Otherwise you can complain that they’ve discriminated against you because they’ve failed to make reasonable adjustments under the Equality Act.
Find out more about this on the Citizens Advice website here.
Two ways to make instant savings before October
There are two simple ways for customers to start saving immediately on energy bills:
- Turn down the flow temperature on your condensing combi boiler - doing this will allow the boiler to run more efficiently and could save around £200 off an average energy bill
- Turn off the pre-heat mode on the boiler - this will mean hot water taps take longer to heat up, but it could save hundreds of pounds a year
A recent report by the Heating and Hot Water Council found that households can save around 6% to 8% on their gas bill just by turning down the heating flow temperature on their condensing combi boiler.
Doing this will allow the boiler to run more efficiently and could save around £200 off an average energy bill.
You need to go to the controls on the front of your boiler. To be clear this is not your room thermostat, this sets the flow temperature for the boiler.
The way in which you adjust the flow temperature and the display information available varies a great deal. There is a handy online guide on how to do this at theheatinghub.co.uk.
Another easy saving is to turn off the pre-heat mode on the boiler, which could mean hot water taps taking longer to heat up, but could save hundreds of pounds a year.
Households should also check they are not missing out on any additional financial support, the quickest way to do this is by using a benefits calculator.
What is an online benefits calculator?
Online benefit calculators quickly work out if you are missing out on any benefits and best of all, they are completely free, independent and confidential to use - so there’s nothing to lose.
In just a few minutes you could find out how much you may be able to claim in extra support, just by entering details about yourself, your residential status, your working status and any savings you have.
You can use an independent benefits calculator to find out:
- What benefits you could get
- How to claim
- How your benefits will be affected if you start work
Where to find help
Advice Direct Scotland
This online tool is the first to fully integrate devolved benefits, including the Scottish Child Payment.
It provides a free and impartial assessment of entitlement to a range of benefits such as Universal Credit, crisis grants and support payments.
Turn2us
Information on income-related benefits, Tax Credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours.
Policy in Practice
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit, how these are calculated and how your benefits will be affected if you start work or change your working hours.
entitledto
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work.
What you will need
You will need accurate information about your:
Savings
Income, including your partner’s
Existing benefits and pensions (including anyone living with you)
Outgoings (such as rent, mortgage, childcare payments)
Latest Council Tax bill
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