New data has revealed that a staggering two million households have been in debt over their energy bills during the second quarter of this year. As household bills have hit new highs every few months, a record number of Britons are in arrears over their electricity payments. Over the past year, households across the country have faced the worst effects of a global fossil fuel energy crisis, as Russia’s invasion of Ukraine sent wholesale gas prices spiralling to record levels. From October, Ofgem raised the price cap on household energy bills to £2,500, more than twice the figure they paid just a year before.
This has placed Britons in a precarious position, as data from the energy regulator Ofgem has revealed that at the end of June, 2,347,511 households were behind on their electricity bills and 1,858,585 on their gas bills. Within just three months, both figures have risen by about a quarter, and by nearly two-thirds since the end of 2020.
This report comes as the new Chancellor Jeremy Hunt last week scrapped former Prime Minister Liz Truss’ plans to freeze the energy price cap for two years, limiting it to six months, and set for it to be replaced by a targetted scheme.
Peter Smith, director of policy and advocacy at National Energy Action, said: “With over two million households already in arrears with their energy bills, it is deeply worrying but not unsurprising.
“Bills have almost doubled in a year, and we haven’t yet seen the full impact of the latest price increase. We’re also now approaching winter and as temperatures drop many people are afraid to turn the heating on or even keep the lights on.
“It’s going to be a bleak and cold winter for the most vulnerable and unless the new prime minister acts urgently we would expect the number of households in arrears to increase yet again next year.”
Morgan Wild, head of policy at Citizens Advice, said: “Our advisers have seen people resorting to unplugging fridges and freezers, washing clothes by hand and skipping meals to cut back on their energy costs because they simply can’t afford to keep the lights on.”
Last month, the charity reported seeing a record number of people who could not afford to top up their prepayment meter, making it the eighth time this record has been broken in the last nine months.
Ms Wild said: “Even with the temporary bill freeze in place, the cost of energy will still be at a record high. This crisis isn’t going away.
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“By the end of September, we’d already helped more people with energy issues than we did for the whole of last year with an unprecedented amount who just can’t afford to top up their prepayment meter. The Government must think carefully before it acts so we don’t see even higher numbers at crisis point in April.”
Citizens Advice also added that it had seen a sharp spike in people being forced onto prepayment meters, which are more expensive and can easily run out of money.
A spokesperson for the Department for Business, Energy and Industrial Strategy told the Guardian: “The Government’s energy price guarantee will save the typical household about £700 this winter, based on what energy prices would have been under the current price cap – reducing bills by roughly a third.
“This comes in addition to £1,200 direct payments to vulnerable households. Anyone struggling to pay their energy bills should contact their supplier as soon as possible to work out an affordable payment plan, which suppliers must agree to do under Ofgem rules.”
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Meanwhile, the pressure group Warm This Winter has argued that, despite the energy price guarantee and the £400 energy bills payment, more support is needed to prevent “severe health impacts of living in cold, damp homes crippling the NHS and causing excess winter deaths”.
The group are calling for support to be targeted at the most vulnerable, arguing that a third cost of living payment should be made on December 1 for those on income-based benefits.
They are also campaigning for a suspension of all forced transfers of households onto more expensive pre-payed meters whether by court warrant or smart meters.
Warm This Winter are calling for a further £150 in disability benefits along with the restoration of the £20 Universal Credit uplift.