A record number of people in the UK are heading into the winter with energy debts as they borrow to pay bills, Citizens Advice has said, as it urged the government to step in with fresh support for gas and electricity bills.
The charity says 2023 has been its busiest year, with the number of people struggling with debts and the amount of money they owe “at record levels and rising”. It has suggested the government considers offering more support this winter.
More than 46,400 people asked Citizens Advice for support in the first six months of this year, marking a 17% rise compared with the same period last year.
On average, those contacting the charity had about £1,711 worth of unpaid energy bills, with analysis showing disabled people and families with young children were the most likely to be struggling with high levels of debt.
The sector regulator, Ofgem, recently estimated that the collective gas and electricity debt owed by UK consumers was about £2.3bn. Nearly 8 million people had to borrow money to pay their energy bills in the first half of 2023, a number Citizens Advice expects to rise over the coming months.
On Friday Ofgem will announce a new energy price cap, which forecasters have predicted will keep the typical annual household bill at the equivalent of about £1,823 from October, although much of that change will be the result of a new formula that assumes lower gas and electricity usage. Under the current formula, the cap will be equivalent to £1,925.
However, that cap level will still mean the about 29 million homes in England, Wales and Scotland that it applies to are paying roughly 40% more than they were two years ago, before supplies were disrupted by Russia’s invasion of Ukraine.
With households not entitled to the £400 support they received last winter, split into monthly payments between October and April, Citizens Advice warned that millions of people were facing a winter as bad as last winter, or even worse.
The charity predicts that by the end of this year it will have seen 26% more people in need of help with energy debts, compared with 2022. It says the number of people already seeking support has nearly doubled in four years.
“What we saw last winter must never be repeated,” the charity’s chief executive, Clare Moriarty, said. “Struggling households unable to pay their energy bills, people unable to top up their prepayment meter and record numbers coming to us for crisis support.
“With increasing numbers of people we help facing a negative budget, where they simply don’t have enough to cover their essential bills, there is a real risk this winter will be worse. The government should look seriously at stepping in with additional bill support to help people through the winter.”
The charity says one option would be scaling up the warm home discount, which offers some pensioners and low-income households on benefits a £150 discount on electricity bills. However, it hopes the government will consider covering £600 – or about 30% of bills – for those who are struggling this winter.
A spokesperson for the Department for Energy Security and Net Zero said the government spent “nearly £40bn covering around half a typical household’s energy bill last winter. Energy prices have fallen significantly since the autumn statement and the energy price guarantee will remain in place as a safety net through to April 2024.
“Additional help is also available for the most vulnerable through an increase to the warm home discount, from which we expect over 3 million households to benefit.
“Our consultation on how best to ensure people can access the full benefits of moving to a smarter, more flexible energy system is ongoing and we continue to keep options under review including for the most vulnerable households.”
