Recent energy debt and disconnections figures released by Ofgem have fuelled concern about the affordability of gas and electricity in the UK according to price comparison website, uSwitch.com.
The numbers paint a gloomy picture; with 1.1million electricity and 0.8million gas customers now in official energy debt. The number of customers who have had to arrange debt repayment plans with their energy suppliers has also increased, with a rise of 19% of these in electricity and 18% in gas.
There’s also a rise in the average amount of energy debt being repaid, from £256 to £277 for electricity, and from £209 to £287 for gas.
Ofgem’s figures exclude customers who are not yet on a debt repayment plan, however research done by uSwitch.com reveals 5.5million households who are also in energy debt. uSwitch.com found the average debt to be around £132, which is 5% higher than 2009, and a staggering 16% higher than 2008 where this amount was £114.
There is also a sharp increase in the number of pre-payment meter customers, with 3.8million now for electricity and 2.6million for gas. Debt recovery is the main reason for this, because energy suppliers in a bid to get their money have installed more pre-payment meters, putting more customers on them.
uSwitch.com’s director of consumer policy, Ann Robinson warns, ‘These statistics are a sign of a far bigger malaise and raise a huge question mark over the ongoing affordability of our energy. Ofgem’s numbers are damning enough, but they completely overlook households that owe money to suppliers but are not on an official repayment programme.’
She added, ‘Our research shows that 5.5million households owe money to suppliers. When you start to look at both groups side by side you start to get a true sense of the size and scope of the issue we face over affordability.’
To help, Ofgem recently brought pre-payment meter prices in line with standard cash and cheque prices, however given the rise in pre-payment customers and the fact that they are still expensive, uSwitch.com does not feel this is enough for struggling customers.
Robinson said, ‘I would urge suppliers to talk to struggling households about their most competitive plans before moving them to a PPM. Although not suitable for all households, online plans are around £300 a year cheaper than being on a PPM – a big saving for those who are worried about paying their bills.’
Sources:
http://www.easier.com/74662-energy-debt-statistics-uswitch.html
