More than five million low-income households are facing the winter without any energy credit, according to a recent survey. The study conducted by Uswitch revealed that 11% of homes earning less than £20,000 a year already owe an average of £163 to their energy provider as the colder months approach. Usually, the energy direct debit system allows customers to accumulate credit during the cheaper summer period to offset higher costs in winter. However, only 8% of households, equating to 2.4 million people, are in debt heading into the season, a decrease from the previous year’s 11% or 3.2 million households.
Energy bills have seen a significant decrease over the past two years, with the average energy default tariff dropping from £2,500 in January last year to £1,568 in July this year, before rising by 10% to £1,717 in October. The average energy debt per household has also decreased by 17%, from £216 to £179 compared to last year, with the typical account balance at its lowest in three years at £128. While 59% of UK households have a credit balance, averaging at £220, a slight decrease from £236 the previous autumn, nine million households are entering winter without any energy credit, a small reduction from the previous year.
Despite improvements for the majority, 32% of those in debt reported higher arrears compared to last year, and 12% switched from credit to debt. Nationally, 43% of households are more concerned about paying their energy bills this year. With the autumn Budget approaching, Uswitch is urging the Government to take action to support vulnerable consumers during the upcoming winter months. Richard Neudegg, director of regulation at Uswitch, highlighted the importance of maintaining around two months’ worth of energy credit as households tend to consume more energy in the winter. He expressed concern that five million low-income households are facing the season without any financial buffer against rising energy bills and advised those struggling to contact their energy provider promptly.
The survey, conducted by Opinium, involved 2,000 UK energy bill-payers from October 1-7. The findings underscore the need for enhanced support for low-income households as they navigate the challenges of the winter season.