One in four people with energy debts (are currently unable to repay, according to new research commissioned by National Debtline. The free debt advice service is leading a coalition of 13 organisations calling on the Chancellor to introduce a ‘Help To Repay’ scheme in the Autumn Statement.
The findings, based on UK-wide research commissioned from Opinium, show that an estimated 6.4 million UK adults (12%) are behind on their energy bills heading into this winter – an increase of more than 824,000 since April.
More than one in five people (22%) say they have cut back on food and other essentials in order to keep up with energy bills (an estimated 11.6 million people). Two thirds (66%) say they will reduce how much they use the heating this winter. Meanwhile millions of people have sold personal possessions (9%, 4.7 million), used their overdraft (7%, 4 million) and turned to high-cost credit (4%) in an effort to stay on top of rising energy costs.
The research also reveals the difficulties facing people falling behind in resolving their situation. Of those currently behind with their energy bill, 21% said their supplier had not accepted an affordable offer of repayment – and 18% had been unable to get through to their supplier when they tried to contact them to discuss the debt. One in four (24%) say they are regularly losing sleep worrying about their energy debt.
The findings come as energy debt hit its highest-ever level of £2.6 billion, according to the energy regulator Ofgem.
A coalition of 13 organisations led by National Debtline and including National Energy Action, Scope and the End Fuel Poverty Coalition, have written to the Chancellor, Jeremy Hunt, urging him to introduce a ‘Help to Repay’ scheme to provide repayment matching and debt relief for unaffordable arrears. Separate National Debtline research shows that almost three quarters of UK adults (73%) think people who have fallen into energy debt due to high prices should be given help to reduce what they owe.
David Cheadle, acting chief executive of the Money Advice Trust, the charity that runs National Debtline, said:
“High energy costs have left millions trapped in energy debt – and these households urgently need support this winter. The Government now has only a limited window of opportunity to act, which is why we are calling on the Chancellor to use the Autumn Statement to step in with the help people need.
“Our Help to Repay proposal would help bring down the record £2.6 billion energy debt in the market – and offer a lifeline to people whose incomes simply will not stretch to pay off their energy arrears. It would also have the support of the general public – with 73% backing this kind of government help.
“National Debtline advisers hear every day of the toll that energy debts are taking on people’s lives and health, and the urgency of the situation cannot be underestimated. Crucially, no one needs to go through this alone. I would urge anyone struggling to cope with their energy bills to seek free, independent debt advice as soon as possible.”
