By Elliot Wright, 22nd January
2010
An increasing number of consumers are falling into debt on their
electricity and gas bills, an Ofgem report reveals.
Figures from the energy watchdog show that there has been a 21%
increase in gas customers entering into new debt repayment
arrangements over the past year after falling behind on their
bills, while there has been a 13% rise in electricity customers
making similar arrangements.
The report shows that the average level of energy debt is 20%
higher than a year ago, with an 18% increase in the number of
people with debts over £600.
While Ofgem blames the recession for spiraling energy debt,
experts say that higher energy prices have also played a major
role.
Price comparison and switching service uSwitch.com points out
that the average annual household energy bill is now £327 more than
it was at the beginning of 2008. Despite energy companies
trumpeting price decreases last year, they barely scratched the
surface of 42% increase in prices the year before.
The average annual household energy bill is
now £327 more than it was at the beginning of 2008.
The rising prices have had an all too obvious impact on the
affordability of energy with some households inevitably finding it
just one cost too many.
uSwitch.com is advising consumers to brace themselves for more
price increases over the next year and to make sure they are on the
best possible deal.
Thomas Lyon of uSwitch.com said: "These debt numbers could get
worse as we are in the middle of a bitter winter which could add an
extra £60 onto our next quarterly bills because of the extra
heating and energy we've all had to use. This will hit those who
pay by cash or cheque particularly hard and some may see no
alternative but to enter into a debt arrangement with their
supplier.
"Households can help themselves by moving to direct debit so
they can spread the cost of their energy across the year. They
should also look to cut the cost of their energy by moving to a
cheaper deal and reducing the amount of energy they use. But
suppliers could help too. If there is enough in their coffers to
cut their prices further we would urge them to do it now so that
consumers can feel the benefit this winter when it will make a real
difference to their heaviest bills."
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