More than five million low-income households in the UK are facing winter without any energy credit, according to a recent survey by Uswitch.
The annual study reveals that one in 10 homes with a household income below £20,000 already owes money to their supplier following a period of high energy bills.
Those in debt have an average outstanding balance of £163, based on Uswitch’s findings.
Despite an overall improvement in the national picture, with fewer households in energy debt compared to last year, the plight of low-income families remains a pressing issue.
The energy direct debit system typically allows customers to build up credit during the summer months to prepare for higher winter costs. However, this year’s survey reveals a stark contrast for many low-income households.
Instead of having a financial cushion, these families are entering the colder season already in debt.
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Energy suppliers are being called to do more for their customers
PA
Despite this, the national picture shows some improvement. Only eight per cent of households, or 2.4 million, are in debt on their energy accounts going into winter.
This is down from 11 per cent or 3.2 million last year. Energy bills have also decreased considerably over the past two years.
The energy default tariff for average annual consumption fell from £2,500 in January 2023 to £1,568 in July, before rising 10 per cent to £1,717 in October.
The average household energy debt has decreased by 17 per cent from £216 last year to £179. However, the average account balance stands at £128, the lowest level in three years.
Almost three-fifths of UK households (59 per cent) have a credit balance, with an average pot of £220. This is slightly down from £236 last autumn.
Overall, nine million households have no energy credit going into winter, a slight reduction from last year.
Despite improvements for many, a third of those in debt (32 per cent) report higher arrears than last year. One in 10 households (12 per cent) have moved from credit to debt.
Nationally, two-fifths of households (43 per cent) express more concern about paying their energy bills this year compared to last year.
Ahead of the autumn Budget on October 30, Uswitch is urging the Government to consider additional measures to protect vulnerable consumers this winter.
Richard Neudegg, director of regulation at Uswitch, said: “It’s worrying that five million of the lowest-income households are going into winter with no buffer against higher bills.
“Households use more energy over the winter, so for the majority paying via direct debit it’s ideal to have a cushion of about two months’ worth of energy credit at this point in the year.”
Neudegg advised those struggling with energy bills to take action: “If your energy account is going into debt or you are behind on your bill payments, speak to your supplier as soon as possible.”
