UK Households Face Rising Winter Energy Bills with £233 Debt

As winter approaches, UK households are grappling with an average energy debt of £233, marking a significant financial strain for millions. Analysis from price comparison site Uswitch reveals that over 3.5 million households currently owe money to their energy suppliers, a staggering increase of 46% from last year’s figure of 2.4 million households. The total arrears now stand at approximately £780 million, the highest level in eight years.

Research indicates that many families are entering the coldest months of the year without sufficient financial reserves to manage their energy consumption. For the first time since the energy crisis began, the typical household’s account balance has dropped below £100. Alarmingly, around 10 million homes lack any energy credit, which includes 2 million low-income households. This situation leaves them vulnerable to unexpected bill increases as heating needs rise.

According to the energy regulator Ofgem, suppliers are facing a growing crisis, with over £4 billion owed in unpaid bills—an increase of £750 million in just one year. Ben Gallizzi, energy expert at Uswitch, expressed concern over the issue, stating, “It’s deeply concerning to see that household energy debt has soared to an eight-year high, which suggests that many homes may face a bill shock soon as direct debit levels are updated. The cost of living squeeze and the end of many government support schemes means that households are getting less help than they used to, causing many to fall behind.”

The findings highlight a troubling trend, especially among low-income households. Nearly one in six households with an annual income below £20,000 are already behind on their energy bills, with an average debt of £60. Furthermore, one in ten of these households report an inability to repay their debts—a figure that has doubled compared to last year. Uswitch’s research indicates that 30% of indebted households owe more than they did a year ago. Disturbingly, a third of those in debt report that their energy supplier has not reached out regarding their arrears.

The average household that has built up energy credit now holds £214, down from £222 in autumn 2022. Only 55% of homes currently have any energy credit available. Although annual energy bills have decreased from £2,500 early in 2023 to £1,755 due to the current price cap, these costs remain significantly higher than pre-crisis levels, exacerbating the financial challenges faced by many families.

As the winter season looms, households are adopting various strategies to mitigate energy costs. Approximately 40% of households plan to wear extra layers to stay warm, while 30% intend to lower their thermostats.

Uswitch is encouraging bill-payers to explore available support schemes, such as the Warm Home Discount, which offers £150 off bills for eligible households, and the Cold Weather Payment, providing £25 per cold week for pensioners and low-income individuals in England and Wales. Additionally, pension-age households can apply for the Winter Fuel Payment, which ranges from £200 to £300, while low-income households in Scotland may claim a Winter Heating Payment of £58.75.

Gallizzi emphasized the importance of early action, stating, “If your account is slipping into debt, contact your supplier as soon as possible. There are hardship funds and support schemes available—and switching to a cheaper fixed deal could also save money this winter.” As the situation unfolds, it remains crucial for households to stay informed and proactive in managing their energy expenses.