Energy debt reaches record high

People owe more money for gas and electricity than ever before, figures shared with BBC Radio 4’s Money Box show.

Consultancy group Baringa says the average debt owed to energy suppliers now tops more than £1,500 – having increased by £300 in just 12 months – while one in five people owe their provider money.

In total, £3.8bn is owed to companies, up from £2bn two years ago.

It comes as the energy price cap is expected to rise by 5% in April.

So what can you do to keep costs down?

Neil’s story

Neil got in touch with us after he was asked to pay a bill for £1,400.

He used to give his partner £500 towards the bills, but when their relationship ended, he found himself paying the utility bills by himself for the very first time.

Neil had switched providers and mistakenly stopped paying his previous supplier before the new agreement started.

Speaking to Money Box on Wednesday (19 February), our collaboration partner Matt Sheeran said it’s easier than you think to fall behind on your bills as Neil did.

“Plenty of people are moving houses frequently,” he explained.

“All it takes is thinking you’ve paid a bill, you’ve not changed your address on the system and you’re getting plenty of bills sent to an old address.”

He added  that many people bury their head in the sand after falling behind, leading to a cycle of stress and increasing debt.

What help’s available?

Energy UK, which represents suppliers, told Money Box that there’s been an extra £500m of support this winter.

They’ve also called for action to help those in debt and make energy bills more affordable.

The government’s also injected an extra £1bn into the warm homes discount scheme, a one-off £150 payment towards your energy bills.

Most energy companies have some funds set aside to help those who are really struggling, while those with prepayment meters may be able to get a fuel voucher to top up their meter.

What you can do

Sheeran says anyone in a similar position to Neil should speak to their provider first, as they have lots of different schemes, help and grants that might be available.

He also advises:

• keeping in touch with your energy supplier to make sure your bill is accurate
• speaking to your supplier if you think you might be overpaying your energy bills
• seeing if you can switch provider to save money
• checking you’re claiming all the benefits you’re entitled to
• using alternatives, like electric blankets
• making sure you’re on the priority services register for extra protection if you’re vulnerable or have young children
• using emergency payments if you have a prepayment meter

Do you need extra support?

Energy debt is one of the main reasons why people ask us for help – around one in three people who turn to us have fallen behind on their energy bills.

We can look at grants you might be eligible for, as well as provide free debt advice and check you’re getting all the benefits you qualify for.