The energy price cap rose on October 1
More than nine million households are entering winter either in debt to their energy provider or with no credit at all, according to a new survey.
Two in five households (40%) are more concerned about meeting their energy bills this winter than they were last year, the poll for Uswitch revealed. Direct debits to energy companies are designed to enable households to accumulate credit during the summer months to offset higher bills throughout winter. However, just 55% of bill payers are currently in credit – down from almost two-thirds (64%) in 2022.
Even among those in credit, only three in 10 (29%) have built up £300 or more, while the typical bill payer has between £51 and £100 set aside. Around 3.4 million households – nearly one in eight – are in arrears with their supplier, owing an estimated £750 million, or an average of £220 each.
Two-thirds of those in debt (65%) say their supplier has been in touch regarding the amount they owe, yet only around one in eight (12%) say they have been assisted in arranging a repayment plan. Ofgem’s energy price cap increased by 3.6% to £1,723 for a typical household on October 1, with forecasters currently predicting a further rise of around 22% in January.
Uswitch found that 43% of bill payers intend to put on extra layers rather than switch the heating on, while one in 12 (8%) plan to cut back on food spending to cover their energy costs.
Ben Gallizzi, energy spokesman at Uswitch.com, said: “Credit is the cushion that turns a frightening winter bill into a manageable one, but for millions, building a summer buffer for the winter simply hasn’t happened.
“With the price cap forecast to jump by around a quarter in January, it is no surprise that worry is climbing. Nearly a quarter of people feel there is nothing they can do, but a few simple actions could make a huge difference.
“If you are deeply in arrears on your energy account and not sure what to do, speak to your supplier early and ask for an affordable repayment plan. Find out if you could be entitled to support.
“If you are on a standard variable tariff, it’s not too late to act. There are fixed deals on the market well below the predicted January cap.”
These findings emerge as Citizens Advice cautioned that a further increase in energy bills would disproportionately affect working families and disabled households. The organisation has urged the Chancellor to use next week’s Budget to pledge additional “crisis support” alongside the Warm Home Discount this winter, and to extend assistance to those receiving child benefit and personal independence payment (Pip).
The charity argued that this would safeguard disabled households and families with children who require help through the coldest months of the year but currently fall outside the means-tested benefits threshold. Citizens Advice chief executive Dame Clare Moriarty said: “Our advisers are seeing disabled workers weighed down by massive energy debts, and parents who are working but still unable to cover the costs of basics for their family.
“That’s why we’re calling for a vital two-step approach this Budget. First, the Government must provide immediate, expanded crisis support. Second, it must deliver on its existing commitments to upgrade leaky, cold and inefficient homes by fully funding the Warm Homes Plan.
“The Government has promised to protect living standards, but failing to act on both these fronts risks causing immediate, avoidable hardship now and in future winters, for those who can least afford it.”
