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UK households in £100 million debt to energy providers

19 October 2016

885,000 homeowner owe their energy supplier money

  • Average energy debt is £121.20;
  • Collective total debt to energy providers is £103,626,000**;
  • Majority haven’t contacted their supplier to discuss the problem;
  • 17% of those who have energy bill debts would like to switch supplier but think that their arrears prevent them from doing so.

According to a new survey*** published today, 5% of homeowners are in arrears with their gas or electricity bills, owing suppliers on average £121.20.  Worryingly, the survey commissioned by Energy, found that only 13% of those struggling to pay their energy bills had contacted their supplier to discuss their situation and ask for help.

The survey of over 1,280 homeowners revealed that 5% of homeowners owe their energy supplier money, on average £121.20.  Of those in debt to their energy supplier 16% owe £200 or more while 4% confessed to having no idea how much they owe.

When asked what, if any, action they had taken in respect of the outstanding payments:

  • 16% said they generally ignore the debt, in the hope it will sort itself out over time;
  • 16% said that their energy supplier had been unsympathetic;
  • 16% said that they had been able to agree a repayment plan with their energy provider;
  • A fifth feel under pressure from their energy supplier to repay the arrears.

The survey also revealed that 17% of homeowners in debt to their energy supplier would like to switch but think their arrears prevent them from doing so.  According to the energy regulator, Ofgem, customers with outstanding debts may be able to switch energy tariff or supplier – which may make it easier for them to pay-off their debts.

Energy customers who have been in debt to their supplier for less than 28 days can still switch, with outstanding debt will be added to their final bill from their old supplier.  Customers who have been in debt to their supplier for over 28 days, will need to repay the debt before they will be permitted to switch. Energy suppliers can’t prevent customers from switching if the debt has resulted from a fault on their behalf.  Customers switching gas and electricity supplier with Energy could cut their energy bills by as much as £366 a year****.

Commenting on the research, Ben Wilson spokesperson for Energy said, “If you’re struggling to pay your gas or electricity bill or you’re in debt with your energy supplier you should contact them as soon as you can.  They should work with you to agree a payment plan you can afford.  For example, letting you make smaller repayments until your financial position improves.

“Ignoring the situation, in the hope it will go away, is absolutely the worst thing you can do.  Energy suppliers have a duty to help and should give you advice about paying off your debt and offer you a repayment plan at a rate that you can afford. If they don’t realise you’re struggling financially, they might cut off your supply.”

See's guide for more help on understanding your energy bill or switching your energy supplier.

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