Energy debt doubles to £1 billion with a quarter of consumers in debt

29th April 2022

The amount of money that households collectively owe to their energy suppliers has doubled in the past year to reach £1 billion, with a quarter (23%) of consumers now in energy debt, according to new research from Uswitch.com, the comparison and switching service.

The number of households in debt to their supplier has risen by half (52%) compared to this time last year, with six million homes now owing an average of £188 to their energy provider. The amount of households in debt is more than two million higher than at any point in the last four years, and the average debt is 54% higher than it was in 2019.

The average amount owed is £58 more than this time last year, leaving many without a war chest to battle rising bills.

At the same time, almost 11 million households have a collective £1.4 billion in credit balances with their supplier, making them better prepared for the expected price hikes in the autumn. However, the overall figure is £500 million lower than last year, which suggests that rising prices have made it more difficult for people to build up a nest egg of credit.

Nearly two in five households (38%) are in credit with their supplier, a decrease of almost a fifth (18%) compared to last year. The average amount of credit is £135, but more than one million consumers have over £300 credit with their supplier.

Of the biggest energy providers, Octopus Energy has the largest proportion of customers in debt (33%), OVO has the most in credit (50%), while EDF has the highest proportion of customers with neither debt or credit (39%).

Rising bills mean that many consumers are taking a different approach to their credit balances. Rather than asking their supplier for their credit balance to be returned,  two thirds of people in credit (66%) plan to leave the money with their supplier to try to reduce their monthly bills. Only one in ten (10%) intend to ask their supplier to return some of their credit.

Four in five (80%) consumers have attempted to cut down their energy use at home amid rising prices, with two fifths (39%) turning down the thermostat, a third (33%) only using the heating on days it felt particularly cold, and 15% turning off their heating entirely.

Uswitch is advising consumers without a smart meter to keep on top of their energy usage and  report meter readings every month, to ensure bills are as accurate as possible and avoid building excessive debt or credit on their account.

Justina Miltienyte, Energy Policy Expert at Uswitch.com, said “Higher prices over the winter has meant we are seeing many more people in energy debt at a time when they should be building up their credit again. This means that households across the country are likely to see their direct debits rise so they can begin to pay back what is owed, making it tough to prepare for future increases.”

“The reality is that the situation is going to get far worse in October when we expect another price rise, so it’s important to take control of your energy use now.”