Energy debt hits households
Thursday, 05 April 2012 09:00Home energy debt is increases affecting almost four million households in the UK.
According to figures out today from uSwitch.com households owe £478 million to energy suppliers.
Families are being dramatically affected by the price hikes struggling to pay off surmounting debt.
Consumers owe about £131 each which is four per cent more than last year’s average debt with 35 per cent of people admitted they owed more than they did in 2011.
"With households still struggling to absorb last year's price hikes, energy debt is on the rise again,” Ann Robinson director of consumer policy at uSwitch.com said.
“And although suppliers have cut their prices this year, the average reduction of £41 or 3.2 per cent doesn't come near the average increase of £224 or 21 per cent seen since the end of 2010 - as a result consumers will continue to struggle to pay their bills and debt will continue to grow.”
Families are in a tough situation because their debt is stopping them from switching to a cheaper plan but without a cheaper plan they cannot save the necessary money to pay off their debt.
The survey found 24 per cent of people choose to ignore the debt and hope it will gradually work its way down.
A further 21 per cent plan to pay it off through a lump sum, and 41 per cent plan to increase their direct debit.
“Paying energy bills by direct debit will help to cut the cost as suppliers offer valuable discounts for paying this way,” she said.
“Consumers should also make sure that they or their supplier are taking regular meter readings as relying on estimated bills can be a shortcut to debt.”
