Household energy debts rise sharply

13/03/2009

One in four UK households are in debt to their gas or electricity provider, shock figures from uSwitch has shown.

According to the financial website, the average amount owed to the firms per household is £126, a rise of 11 per cent over 2008.

This total is likely to have risen due to the financial crisis and economic downturn over recent months, which has put increasing numbers out of work and shut off access to cheap credit.

As a result, more people are finding themselves less able to pay their energy bills.

Last year also saw the UK's "big six" providers hike their gas and electricity tariffs on two separate occasions.

Kevin Still, EuroDebt director, said: "Our experience was that many new and existing Debt Management clients saw their energy bills rise by upwards of 35 per cent and this was one of the major drivers for us introducing energy switching services for not just our clients, but all UK households.

"The figures reflect the fact that many households pay their unsecured creditors in preference to priority creditors like energy providers and this can create a problem if consumers want to switch tariffs to the cheapest provider, as they have to clear the arrears before they can do this."

He added: "One of our priorities when we work with a new client is to put a realistic plan in place to clear priority arrears and then look at changing energy tariff when the client is eligible to do so."

Tags; Housing Debt and Bills, Young Family Finances, Retirement Money Problems,

• Share
• 
• 
• Store
• 
• Follow
•