Average household energy debt rises to £216

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  new research from Uswitch.com, has revealed.

The average household debt is up 13% on the £190 figure seen at this time last year, and the number of homes that owe money to their supplier has risen from 2,800,000 to 3,200,000.

More than nine million households have no energy credit going into winter – the time of year when homes use the most power. Typically, customers should build up energy credit during the summer so they have a war chest to rely on for the coldest months.

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. Nearly 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 only a quarter (25%) saying they are unconcerned. 

Many of those in energy debt have no plan for how they will improve their situation, with nearly a quarter (23%) just hoping that the problem will go away over time. 

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 a repayment plan with their provider. Worryingly, one in ten (9%) say they can’t afford to pay off their arrears.

With the cold winter months approaching, many households are planning drastic measures to reduce their energy bills. 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 won’t put on the heating, even when it’s cold. 

Nearly three fifths of households (59%) have built up a credit balance ahead of winter. The average credit is £236 – down slightly from £249 last autumn.

Uswitch.com is urging households who can’t keep up with energy bills to contact their suppliers and request a more affordable payment plan. 

Richard Neudegg, Director of Regulation at Uswitch.com, 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.” 

Table: Average household debt