Energy bill debt rises 36%

4th October 2023

EDF Energy has reported that the number of homes falling into debt on their energy bills has increased by 36% since the beginning of the year. The company also said standing charges on energy bills have increased by 55% since April 2021.

The energy company has announced that it is boosting support for vulnerable customers to £40 million and will effectively roll back standing charges to their April 2021 levels.

The daily standing charges on a household energy bill have increased by 107% on electric and 8.2% on gas for a direct debit customer since April 2021, while at the same time, current schemes like the Warm Home Discount haven’t increased since before the energy crisis, despite energy bills being almost double.

At the same time, the number of EDF residential customers with an unsecured debt – debt which has no repayment plan in place – has increased by 36% since the beginning of this year, while EDF’s partner IncomeMax has seen a 44% increase of in-work households referred by the supplier requesting Government financial support.

To help struggling households, the supplier is boosting support for those most in need by more than £ 15 million. Alongside additional funding for its Customer Support Fund, which provides debt relief and energy efficient white goods, around £7.5 million will be spent on effectively rolling back standing charges for at least 260,000 Warm Home Discount Core Groups 1 and 2 customers, to their pre-crisis level (April ’21) for the first quarter of 2024, when the price cap is expected to increase.

This financial support will be applied to eligible customers’ accounts as a £30 credit in December and means standing charges will effectively be an average of 56p instead of 87p per day, covering the period from January through to March.

Since its launch in 2003, EDF’s Customer Support Fund has provided more than £50m of support. This winter, EDF will once again be offering some customers in need a ‘fresh start’ by clearing their debt, alongside payment matching customer top-ups for its prepayment meter customers. Customers eligible for these schemes will be contacted by the supplier. Of those EDF customers who were supported with debt relief in 2022, 87% remain debt free after 12 months.

Philippe Commaret, Managing Director for Customers at EDF said “Hard pressed households that cut back on their energy use to save money shouldn’t face their hard work being undone by these higher and regressive daily charges. The current system means those with smaller homes, who use less power, pay proportionately more. That is not right. And that’s why we’ve decided to roll back standing charges for at least 260,000 customers to their pre-crisis levels this winter.”

“For those that won’t benefit from this scheme, our Customer Support Fund has also been increased to try and reach as many households as possible who are struggling with energy debt this winter. We supported significantly more customers last winter than in 2021 and we will help an even greater number this year. However, we know our efforts alone won’t be enough.”

“We are calling on Ofgem and Government to review the distribution of costs between unit rates, standing charges and even general taxation. Many costs could potentially be better collected through other means, that also better support Net Zero. We cannot afford to offer this support unilaterally indefinitely, which is why we a calling for a review.”

“Vulnerable customers also need a new social tariff to provide long-term, targeted support for those 6.6million people living in fuel poverty. Two years of energy crisis have demonstrated the urgency to ensure clean, secure and affordable energy for Britain’s homes and businesses for the long term.”