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Energy prices are forcing people into debt with demand for advice at record levels.

By Anna Tickle and Research & Campaigns team

Energy prices are forcing more people into debt every day. More are needing general debt advice but we’re also seeing a growing average level of energy debts.

At national level, the energy regulator Ofgem recently reported household energy debt over 3 months at £2.6bn, its highest ever.

The root of the problem for many families is simply that their income doesn’t cover outgoings. Worse still, Citizens Advice say more than half of CA debt clients across the country have a negative budget where income falls short of essential costs.

Company support

In response, Energy UK, a trade association, has announced energy companies moving to support customers in fuel poverty including:

  • Discretionary support of around £54 million
  • £1 billion in mandatory schemes, such as: the Energy Company Obligation (ECO) and the Warm Home Discount (WHD)
  • Continuing support introduced at the beginning of the Covid-19 pandemic. For instance, payment holidays and restructured payments plans
  • Good practices shared by Energy UK. This includes: the Customer Service Good Practice Guidance 2022 and Energy UK’s Vulnerability Commitment.
Issues double

It’s now essential that the industry communicate these helpful measures effectively. They are an important step in the right direction by no means sufficient. Our local data shows why. In the year to March 2023 we saw fuel debt issues almost double on the previous year.

But fuel debt here and everywhere is part of a much larger and growing debt problem.

In the year to October the number of general debt clients increased by 25% year on year to over 500. The number of debt-related issues rose 22% to 1,375.

The clear conclusion is that energy debt is rising and current financial help isn’t enough to stop more people falling into problem debt.

We are calling urgently for new support over the coming winter. And long-term targeted support through social tariffs and energy efficiency improvements to bring energy bills down for good.

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