Quarter of households behind on energy payments
Almost seven million households are in debt to their energy suppliers, research suggests.Just over a quarter of customers (26 per cent), or 6.8 million people, owe an average of £114 to their supplier, a survey for price comparison service uSwitch.com found.
Figures from regulator Ofgem show two million customers are in debt repayment programmes to energy companies, while Citizens Advice has reported that energy debt cases have risen by a third.
The poll found that only 13 per cent of the 19 million customers who pay by direct debit had asked their supplier to increase their payments, despite prices rising by 15 per cent this year. Less than a third (29 per cent) of direct debit customers said their supplier had given them an estimate of expected bill increases.
The report warned that customers with more than £100 of debt were unlikely to be allowed to switch to another supplier. USwitch said energy prices had increased by about £136 per household since the beginning of the year.
However, many customers were underpaying while their supplier reviewed their account to ensure they were charging the correct amount.
Ann Robinson, director of consumer policy at uSwitch, said: "6.8 million households are in debt to energy suppliers. This issue has to be tackled now before it snowballs further. As well as the misery and uncertainty that debt can cause, owing money to an energy supplier can prevent consumers from being able to reduce household expenditure by moving to a lower cost energy deal. It is a barrier to switching and consumers cannot afford to have this option closed to them in today's economic environment."
She advised customers to increase payments if possible and demand regular meter readings instead of relying on estimated bills.
She said: "Getting bills right becomes even more critical at a time of rising prices as there is a greater chance of customers being pushed into debt.
"I would urge suppliers to make debt avoidance a priority. Give consumers an idea of how much more they could potentially be paying, warn them of the dangers of underpaying and advise those who are near or already in the red to get in contact immediately about increasing their monthly payments."
Image: Ann Robinson, director of consumer policy at uSwitch