More than five million in debt to energy supplier

The number of consumers living in households that are in debt to their energy supplier has exceeded 5.3 million households, Citizens Advice has revealed.

The survey also revealed that more than two million people across will self-disconnect this winter because they cannot afford to top up their prepayment meter (PPM). Citizens Advice is warning that existing support is “simply not going far enough” and that a long-term plan to tackle spiralling energy debt is now essential.

The charity is concerned that for many it won’t just be a one off. Its analysis reveals that last year, 1.7 million people disconnected at least once a month. Whilst 800,000 people went more than 24 hours without gas and electricity, unable to make a hot meal or take a warm shower, because they couldn’t afford to top up.

Now Citizens Advice predicts the crisis is set to get even worse in the coldest months of this year,  just as suppliers have been allowed to restart forcible installations of prepayment meters.

The charity says it expects this to be its busiest winter ever for helping people who can’t afford to top up their prepayment meter. Its new research shows more than five million people live in households that are in debt to their energy supplier, putting them at risk of debt collection, including being forced on to a meter they can’t afford to keep topped up.

After helping record numbers for energy debt in 2023, Citizens Advice warns that existing energy bill support is simply not going far enough. It says a long-term plan to tackle spiralling energy debt is now essential.

With the removal of government support schemes, average energy costs are as high as last winter for many households. The typical monthly energy bill is expected to come down by at least £20 in April but will still remain at worrying levels.

The impact is stark. Energy debt has hit a record £2.9bn as households struggle to make ends meet and pay their essential bills. Citizen Advice’s new research suggests one in four people can’t afford their essential bills and one in ten households have had to borrow money in the past six months to cover their energy bills.

The energy price crisis is impacting households in other ways too. Half (49%) of those in debt to their energy supplier have turned off the heating in their homes as a result of being in energy debt.

And almost three million people live in households where they have skipped meals, cut back on food spending or sold or pawned possessions in the last year to save money to keep their meter topped up.

To prevent even more families falling into debt, Citizens Advice wants to see urgent reform of the Warm Home Discount. This has failed to keep pace with rising prices, and should be increased and made available to a wider range of households.

The charity also wants the government to work with Ofgem to develop a joint action plan to deal with energy debt. This should include increased funding for energy debt support to help meet spiralling demand.

Citizens Advice is particularly worried about households with children under four, who are twice as likely to be in debt and be forced to disconnect from their gas and electricity than those without children.

It’s found that half of prepay users with children under four had disconnected in the past year because they couldn’t afford to top up, compared to a quarter (23%) of people with no children. Living in a cold home can have significant negative impacts on their health and development.

New rules on force-fitting only provide absolute protection for households with children under two. As this practice restarts, Ofgem should monitor the impact of groups who missed out on absolute protection from this practice and expand the rules if there is evidence of significant harm.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said “Our frontline advisers are helping more people than ever who can’t pay their energy bill. Record numbers are in debt to their supplier and millions with a prepayment meter are too often going without heating and hot meals because they can’t afford to top up.

“The government has not provided new energy bill support for those in need and has run out of time to develop the long-term approach it promised by April 2024. Without immediate action, we risk re-running this same crisis every winter.”

David Cheadle, acting Chief Executive at the Money Advice Trust, the charity that runs National Debtline said “With energy debt at record levels, this latest research from Citizens’ Advice reveals the human cost of not being able to afford gas and electricity.

“Millions are now trapped in energy debt, and urgent support is needed to ensure people are able to heat their homes this winter.  The government must act by introducing a ‘Help to Repay’ scheme for households with unaffordable energy arrears by providing support via payment matching and debt write off.”