2.93 million UK households in debt to their energy suppliers

As inflation continues to creep up, the amount of UK debt also continues to rise. It is now estimated that around £400 million is owed to various power companies alone. There are several reasons for this, and for many home owners, this debt can cause huge anxieties. Here we take a look at how so many households are now in debt to their energy suppliers and what the main causes of this are.

Most Houses in Debt Before Winter

The number of households in debt with their energy supplier before winter approaches is worrying. Energy suppliers expect most people to be in credit before winter when our energy bills are higher. There are around 300,000 extra households that owe their energy suppliers money as of November 2018, which is a huge increase. Collectively the UK owe energy suppliers £393 million as of October 2018, which is an increase of around 25% on last year. This means many people in the cold winter months are too afraid to turn their heaters on for worry of not being able to afford it.

For many, fuel poverty is real and this will only continue to worsen as suppliers push up their prices and unexpected bills come in to play. For older people, the rising cost of fuel is a huge problem. They need more heat than usual, especially those that are retired and spend most of their time in their home. Not being able to afford their bills is a reality for many older people, but not heating up their homes can lead to them becoming seriously ill.

Suppliers Raising Their Prices

The biggest reason so many households owe suppliers money is due to the fact they keep raising their prices each year. Some of the biggest suppliers in the UK such as British Gas have increased their prices not just once but twice this year alone. The suppliers blame this on the increasing cost of wholesale energy, but this increase affected around 3.5 million customers. For those on a tight budget, any extra money on their bills could lead them to not have cash left over for other necessities such as food.

The average price a dual fuel customer now pays is £1,205, which is an increase of £104 in the space of six months. In order to meet these needs, many consumers are looking for loans for fear of being cut off from their energy supplier. Especially as Christmas approaches, many households use more energy to heat their homes. For those with bad credit, a loan won’t seem like an option, but now you may be able to get that extra cash to pay your bill this month. If you want the advantages and disadvantages of a bad credit loan, Cash Lady has more information to help you make the right decisions.

Unexpected Expenses

Another reason people do not have enough left at the end of the month to pay their energy suppliers is unexpected expenses. This can be anything from transport problems to health issues. One of the largest unexpected expense in the UK is motor vehicles. Many of us rely greatly on our cars; from getting to work to picking up our kids from school, we need our car. When our car breaks down or needs a new part, we want to get this fixed as soon as possible to make our lives easier and ensure we can get to work. For some, our vehicle needs to be in good working order for our jobs, this is especially the case in companies such as taxi drivers or window cleaners. An unexpected breakdown causes many problems including breakdown service costs, mechanic costs, hire car costs, and the cost of public transport whilst you do not have your car.

Unexpected bad health is also a huge problem for many, especially when we have to take sick days, meaning less income for the month. When this happens, many of us cannot afford our bills at the end of the month. Often when we are ill, we are in the house more too, meaning we will use more energy than usual. Unfortunately, this can lead to a larger bill on a reduced income.

How Can I Avoid This?

The best way to combat these issues is to find another energy supplier; there are many energy comparison websites online that could save you a lot of cash. One man had a great idea to help with the ever-increasing costs of energy and for those who watch Dragons Den, you may have already heard of him. You can sign up to his service for free, which helps you to look after your bills.

As energy costs go up, households will continue to suffer. Finding a cheaper energy supplier is the best way to ensure that we do not increase these statistics any further.