High bills and energy debt fuelling a women’s mental health crisis

Over one in ten UK women (14%) have been in energy debt in the last six months – with nearly a third (29%) of those worried about paying their bills, and 19% suffering sleepless nights.

Nine percent even say it has made them ill, with 6% missing work because of stress, according to new research from the Women’s Institute (WI) published during Mental Health Awareness Week (May 13 to May 19). 

The survey was commissioned by Warm This Winter for The WI and polled over a thousand women across the UK. Its aim was to assess the impact of the cost-of-living crisis on women – financially and from a mental health viewpoint. 

In further key findings, 15% of women are either considering or have skipped meals to make ends meet, one in eight now considers relying on foodbanks and 14% have given up their hobbies, which in turn affects mental health.

Melissa Green, National Federation of Women’s Institutes (NFWI) CEO said: 

“Our research shows that the cost-of-living crisis deeply affects women, who often take on the mental load of running a household on top of their jobs. 

“We all know and feel the financial impact, but it’s desperately worrying to see women skipping meals, cutting back on essentials, or borrowing just to make ends meet. Overall, 60% said that 2023 had been a more difficult year than 2022 – which is a depressing statistic.”

Fiona Waters from Warm This Winter said:

“The survey indicates that women can see that the UK’s energy system is broken and want long term solutions such as 73% calling for properly funded insulation and renewable energy schemes that will end the vicious circle of sky high bills. They also want the UK to move away from being so dependent on expensive gas for our energy, which harms the climate, creates insecurity and inflates bills.”[1]

The research by Opinium also found that over two-thirds (68 percent) felt there should be financial support for vulnerable people such as children, the ill or elderly, to help with their energy bills. Respondents also felt that the recent £28 additional charge being levied by Ofgem to help energy suppliers recover energy debt should be spent on helping people to repay their debt (38%) or even write off customer debt (20 percent) altogether.

A spokesperson for the End Fuel Poverty Campaign commented:

“People have spent over three years facing sky high energy bills and are no longer prepared to put up with increases in their bills to line the pockets of an energy industry which has made billions from the energy costs crisis. What people want to see are a mixture of long term solutions to fix Britain’s broken energy system and short term support for those who need extra help with their bills.”

Melissa Green, NFWI CEO said these findings are ‘a clear clarion call’: 

“With 15% of women in fuel poverty telling us they are borrowing money from friends or family, and 20% again in energy debt – using overdrafts and credit cards to cover their bills – there is much more that policy makers can do to make companies work for their customers; and not simply shareholders. Women are the change-makers here, representing just over half of UK eligible voters. It’s time to hold those in power to account – which the WI has never shied away from doing.”

ENDS

[1] The majority of women feel the UK’s energy system is broken (60 percent) and want to see real change with nearly three quarters (73 percent) calling for proper financial help to insulate homes and 71 percent asking for more investment in homegrown renewable energy that would improve the UK’s energy security.  Nearly two-thirds (61 percent) also want to see a ‘proper plan’ in place to phase out gas powered energy plants.

Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

Energy debt causing households to live in fear of loan sharks

Households in energy debt are turning to illegal money lenders to pay for their bills and everyday essentials, according to new research shared with the House of Commons Energy Security and Net Zero Committee today.

Research among households in energy debt by the Warm This Winter campaign, found that almost one in five (18%) have turned to illegal money lending sources in the last 12 months. [1]

Among younger households in debt the situation is even worse, with a quarter (24%) of under 35s and a third (32%) of customers aged 35-44 turning to illegal money lending.

In the next 12 months, the illegal debt mountain is due to grow with two-thirds of households in energy debt due to look for more sources of money. While many will turn to credit cards (27%) and overdrafts (14%), 20% will borrow from family and 14% will turn to illegal money lenders.

The impact on households is that 13% of customers in energy debt owe money to someone they are frightened of. This figure rises to 18% among those living with long-term illness and in households with young children under the age of 5.

Simon Francis, coordinator of the End Fuel Poverty Coalition gave evidence to the Committee and presented them with the research findings:

“The findings are horrific and worse than experts had feared. 

“Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas.

“Energy bills and energy debt are a fundamental part of our broken energy system which has led to the cold damp homes crisis we saw this winter. 

“The long term solutions are obviously wider than changes to standing charges and tariff reform. We need to see more insulation, ventilation, unblocked cheaper renewables and weaning ourselves off oil and gas to improve energy security.”

The Committee also heard that Time of Use tariffs, one of the main proposed solutions to high energy bills, risk leaving behind millions of households. Research by Survation for campaign group 38 Degrees found that over half (54%) of the public may become energy exiles – unable to access the latest market innovations due to their household circumstances. [2]

Veronica Hawking, acting campaigns director at 38 Degrees said:

“This research shows millions could miss out on time-specific tariffs designed to lower bills, through absolutely no fault of their own. This includes people who rely on energy for medical needs, who need to leave the house at a regular time of day, or who can’t access a smart meter.

“That’s why it’s crucial that any changes to our broken energy system must be underpinned by a social tariff, and why the government’s U-turn on a social tariff consultation was a huge missed opportunity. Whoever forms the next government must make it an absolute priority.”

As well as introducing a social tariff and banning discriminatory energy tariffs, the Committee heard recommendations on tackling the energy debt crisis. These included:

  1. A universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through our bills for energy debt costs this year.
  2. A ban on energy firms from selling on debt to debt collectors.
  3. Better regulation of energy debt with energy debt and debt collection agencies used by energy firms to be subject to Financial Conduct Authority rules.
  4. More training for energy firms’ staff in recognising illegal money lending.
  5. Reforms to standing charges, including their abolition for prepayment meter customers if certain conditions are met. [3]

Warm This Winter spokesperson Fiona Waters said: 

“We like to think of ourselves as a civilised society but surely having heat and power is a fundamental human right for everyone and the idea that people are so desperate they are turning to dangerous loan sharks is horrific. 

“It’s extremely worrying to see a quarter of under 35 year-olds in energy debt have no way out other than turning to illegal money lending. This is setting themselves up for a lifetime of being at the mercy of loan sharks and their ilk and I dread to think of the impact this has on young families. 

“We need a government that won’t abandon people with unaffordable energy bills and will instead invest in permanent solutions, like home insulation and homegrown renewable energy.”

Jonathan Bean, from Fuel Poverty Action added:

“Energy inequality is growing to dangerous levels, with millions of us starved of energy or forced into dangerous borrowing. We need a fairer system where everyone is safe, and has access to cheap renewable energy.”

ENDS

[1] Research was conducted among 500 people across the UK living with energy debt. The interviews were conducted online by Sapio Research between April and May 2024 using an email invitation and an online survey. 

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. Sample was selected from Online partner panels. 

[2] Survation polling for 38 Degrees. Survation polled 2,018 members of the general public, online between 26-29 April. Data were weighted to the profile of individuals aged 18+ in UK. Data were weighted by age, sex,  region, ethnicity, education level, and annual household income. The total includes those who are unable to access smart meters, rely on energy for medical or disability needs, have inefficient heating or who are unable to control when they use electrical appliances.

[3] Campaigners have called for reform of standing charges so that:

  • Investment and all policy costs are moved onto general taxation (and an end to the Ofgem “float and true up process”)
  • Reductions in marketing, operating, headroom and EBIT allowances for suppliers and moving marketing and operating costs onto unit charges to improve market competitiveness.
  • Review the £30bn profits in the network and transmission sector and examine the impact of moving network costs onto unit charges.
  • After reforms and reductions in charges, the end to PPM standing charges should be possible, subject to further analysis and equalities impact assessments.

Customers set for £1.3bn bill for energy debt charges

Households will be paying energy firms a combined £1.3bn in annual charges to help suppliers recover bad debt from 1 April.

A new report from the Warm This Winter campaign also casts doubt on the effectiveness of the charges in actually helping customers struggling with their bills. [1]

Energy firms were already able to charge £842m a year on bills for bad debt allowances, but from 1 April 2024 Ofgem has ruled that an additional £735m can be charged (or £28 per household per year). The amounts are offset by a £275m adjustment to the bad debt charges incurred after the Covid pandemic. 

The combined impact of these charges varies depending on the bill type with prepayment meter customers paying the least at £25.17 per household per year. Direct debit customers pay £38.96 a year on these charges while standard credit customers are hit hardest paying £129.71.

The report also reveals that “debt-related costs” consist of three main elements: bad debt write offs, debt related administrative costs and working capital. It appears unclear if these write offs will come off customers’ accounts, or if they are written off on supplier income statements while the debt is sold to debt collection agencies.

In addition, the debt related administrative costs and working capital include recouping the costs of the moratorium on involuntary prepayment meter installations. The moratorium was brought in after it was found energy firms were breaking into vulnerable people’s homes to force them onto a prepayment meter.

Firms can also claim for the administrative costs to suppliers from dealing with customers in debt, despite other allowances in the price cap enabling them to cover operating costs. The allowances also allow firms to claim for the day-to-day costs of customer arrears and using the money to cover the period between an energy firm incurring costs and receiving customer payments.

The news has been met with concern from consumers, with new polling from Opinium finding that over half (55%) of the public oppose energy firms using money raised through the additional £28 per household being spent on debt administrative costs. [2]

The public felt that around half (48%) of the money raised from the £28 debt charge should be spent writing off household energy debt of the customer accounts of those most in need.

Fiona  Waters, spokesperson for the Warm This Winter campaign commented:

“Energy bill payers are quite rightly up in arms about these additional costs which look like they do nothing to reduce the debt of ordinary people but instead help energy companies pursue those who simply can’t pay.

“It’s yet another outrageous rip off caused by our broken energy system, where ordinary people are expected to foot the bill all the time whilst energy giants bank billions and their bosses live in the lap of luxury.

“We need long term solutions such as expanding homegrown renewable energy and a mass programme of insulation to bring down energy bills for good so UK families no longer find themselves in debt through no fault of their own and are hounded for payments.”

A spokesperson for the End Fuel Poverty Coalition, said:

“The recovery of energy debt led to the forced prepayment meters scandal in 2023 and customers are still paying the price for energy firms’ poor practices.

“Rather than hit hard pressed households with higher standing charges, we need to see a longer-term approach to solving the energy debt mountain, such as an industry wide Help To Repay scheme.

“If Ofgem persists in implementing this charge, the very least they can do is ensure it is used to write off debts from customer accounts and isn’t spent on hiring debt collection agencies.”

Policy expert and report author Richard Winstone, added:

“Ofgem produced over 350 pages of documentation to reach a conclusion that will cost the public hundreds of millions of pounds extra this year with no clear benefit for consumers. They pack their documents with complicated jargon and formulae, yet they could not find room for a simple explanation as to how this money will actually benefit those struggling with their energy bills. 

“Throwing money at suppliers and hoping they do the right thing is what has led to record profit levels from the likes of British Gas at a time when customer service standards are at their lowest for a decade and customer debt is at its highest. Ofgem either needs to stop increasing the cost to consumers or start creating regulation that ensures suppliers use the additional funds for specific, consumer-benefitting, purposes.”

Jan Shortt, General Secretary of the National Pensioners Convention, commented:

“As always, it is the customer that pays, not the shareholders or energy industry who are currently making the biggest profits for years. Sustainable and affordable energy sources are a must and the regulator should consider how it can protect customers from this unacceptable level of levy when everyone is still struggling with high energy bills.”

ENDS

[1] “An overview of the additional debt related costs”, Richard Winstone / Warm This Winter, March 2024. Full report available to download

[2] Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

55% oppose using the money to cover admin costs, 25% support, 20% don’t know.

48% figure is based on respondents choosing a range of percentages to be used to write off debt. The figure includes the responses from 16% who felt none of the money should be used in this way, 16% felt all of the money raised should be used in this way. 

People unable to clear energy debts as calls for Help to Repay scheme increase

One in four people with energy debts (24%) are currently unable to repay, according to new research commissioned by National Debtline.

The 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.”

Matt Copeland, head of policy and public affairs at National Energy Action, said:
“Debt levels in the energy market are at an all-time high after years of unaffordable prices. And monthly energy bills for many will be higher this winter than the last. The impact that this has on low-income households is
profound. One-third of British adults say they will struggle to pay their energy bills this winter.

Ofgem’s proposal to raise the price cap as a way of dealing with the increased debt only exacerbates the problem. Failure to provide support to reduce energy bills and energy debt would be catastrophic, leaving millions of households unable to stay warm and healthy this winter.

“A ‘Help to Repay’ scheme would accelerate debt payments, ease the burden on household budgets, and help create a more sustainable energy market.”

James Taylor, executive director of strategy at disability equality charity Scope, said:
“Winter hasn’t hit yet and already Scope’s energy helpline is being inundated with calls from disabled people facing eye-watering amounts of debt. On average, our customers have almost £1,800 worth of energy debt – more than double this time last year. That’s despite cutting back everything they can.

“Life costs a lot more for disabled people, who need more energy to power wheelchairs and breathing equipment, or have the heating on more for their health. The government must defuse this debt timebomb, bring in emergency support for this winter, and keep its promise to consider an energy social tariff which would end sky-high bills for disabled people.”

This month Ofgem announced plans to increase energy bills by £17 per household to reduce the risk of energy firms going bust or leaving the market – a decision that Fiona Waters a spokesperson for the Warm This Winter campaign called  “appalling.” Waters added:

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants.”

Commons Committee asked to take urgent evidence on forced PPMs

The House of Commons Energy Security Committee has been asked by campaigners to hold an urgent evidence session on the prepayment meters scandal.

Last week Scottish Power was granted 124 warrants by Berkshire Magistrates Court to forcibly enter people’s homes to force them onto prepayment meters (PPMs). 

According to media reports, the magistrate granted all 124 warrants after examining just 20 of them in detail.

One of these warrants was granted against a property in Grimsby, almost 200 miles away.

The End Fuel Poverty Coalition has now written to the Committee outlining more than ten serious concerns about this decision and requesting its help in understanding the circumstances around the warrants. 

The group has asked the Committee to take evidence within the next 28 days from Scottish Power, Richburns Ltd (debt collection agency), His Majesty’s Courts and Tribunals Service and Ofgem.

The forced PPMs scandal rocked the energy industry after investigations by the i paper and The Times revealed the extent energy firms were using the courts to gain warrants to people’s homes to force vulnerable people onto PPMs. 

Expert reports highlight the health dangers potentially caused by people’s PPMs switching off and leaving them in cold damp homes.

These warrants were granted despite a ban on the forced transfer of homes onto prepayment meters still being in place. 

Campaigners have previously written to Ministers to call for a Help To Repay scheme to be introduced to remove the need for forced prepayment meter transfers.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It is totally inappropriate for energy firms to be seeking to force their way into people’s homes to push them onto dangerous prepayment meters in this way. This strategy leaves potentially vulnerable customers at risk of disconnection and going without energy.

“Instead, we need Government and industry to agree to a Help To Repay scheme which will help bring down the astronomical levels of energy debt and help households struggling with the cost of living crisis to get back on an even keel.”

National Pensioners Convention General Secretary Jan Shortt said: 

“It is interesting that Scottish Power had warrants passed before 8 November, when Ofgem’s mandatory regulations covering energy providers are due to come into force.

“We oppose magistrates signing warrants for forced entry in bulk. Magistrates have the overriding power when it comes to human rights, and we expect that they will take genuine steps to ensure that every application for a warrant to force entry to fit a prepayment meter will be vigorously scrutinised to ensure adherence to the Ofgem Code of Practice.  

“We recognise this will cause delays, but the alternative is to breach individual human rights and cause distress to those struggling with paying bills.

“We would prefer to see an end to the use of prepayment meters with an agreed strategy to transfer those customers who do not want them back to a payment scheme that enables them to be debt free.”

Frazer Scott, CEO, Energy Action Scotland commented:

“People are struggling with unaffordable energy costs and spiralling debt. This has reached record levels. Some of the most vulnerable in society have not seen the right levels of support to ensure that their health and wellbeing is protected. 

“The forced movement of people from credit to prepayment places an unacceptable level of risk to the lives of people. Government, regulator, suppliers and our courts are failing to provide meaningful protection. 

“We are dismayed that action has been taken by suppliers and the courts ahead of the introduction of changes to regulations which should ensure that no vulnerable person has to endure being subject to a forced installation.” 

Warm This Winter spokesperson, Fiona Waters said: 

“It’s appalling that Scottish Power have been granted warrants to force their way into over a hundred homes, install prepayment meters and leave vulnerable people with just £30 credit. Prepayment meter users often have to clear debt before they can top them up. We hope Ofgem and the Energy Security Committee will exert all their authority to stop this and not condemn these customers to living without any heating or lighting.”

Jonathan Bean of Fuel Poverty Action added: 

“Scottish Powers’ plan to break into homes, and risk leaving people unable to stay warm this winter, has been exposed. The courts are failing to properly assess most cases, and Ofgem is guilty of wishful thinking. Government must act now to end this inhumane and dangerous practice.”

The full letter is available to read as a pdf.

Consumers need help to repay energy debt, not higher bills

Proposals to increase energy bills further in response to surging levels of household energy debt have been criticised by campaigners.

While energy suppliers made more than £2bn in profits in the first half of 2023 alone, new figures from Ofgem found energy debt reached a record £2.6 billion due to soaring wholesale prices and cost-of-living pressures on households.

A one-off increase to customers’ energy bills of up to £17 a year is now being considered by Ofgem, which the regulator argues will protect firms from customers running up large debts.

But charities and campaigners have called for the introduction of a “Help To Repay” scheme instead of passing the cost of debt onto all households.

The coordinator of the End Fuel Poverty Coalition, commented:

“Households are struggling under the huge weight of energy debt – which has been caused through no fault of their own, but by record energy bills.

“All this time, energy firms have continued to profit from the misery of people racking up debt and living in cold damp homes.

“Rather than pass on more increases to energy bills, the Government needs to work with energy firms to introduce a ‘help to repay’ scheme to help get Britain’s households back onto an even keel.

“Given that the Government is due to hand Norwegian oil giant Equinor a massive tax break for the controversial Rosebank fossil fuel field, there’s an obvious source of money for this support plan.”

Adam Scorer, chief executive of National Energy Action, said: 

“This is the highest level of energy debt we have seen, it is growing quickly and concentrated in the poorest households.”

In June, a range of organisations including the End Fuel Poverty Coalition, Money Advice Trust, StepChange Debt Charity, Scope and National Energy Action wrote to the Secretary of State for Energy Security and Net Zero [pdf] with proposals to set up a ‘Help To Repay’ repayment-matching scheme.

David Cheadle, acting chief executive of the Money Advice Trust, the charity that runs National Debtline, told Press Association: 

“With energy debt at a record high, now is the worst possible time to increase bills further, as Ofgem is proposing.

“Instead, the Government must step in and act now to help households facing unaffordable debt repayments by introducing a Help to Repay scheme to offer payment matching and write-off.

“Doing so would help tackle the record levels of energy debt we are now seeing, without the need to increase energy bills for all customers.”

Fiona Waters, spokesperson for the Warm This Winter campaign, said: 

“The fact Ofgem is considering a £17 additional bill on all households is appalling. They say it’s to cover £2.6 billion of energy debt, but that enormous debt just proves ordinary people cannot keep footing the bill for our broken energy system. 

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants. 

“Why not use the billions that its giving in tax breaks to Norwegian oil giant Equinor for the Rosebank oil field, which will do nothing to lower fuel costs, to write off this debt that people have through no fault of their own. ”

Surge in energy disconnections and debt

New figures from Ofgem have revealed that the number of customers disconnecting from the grid have surged – along with levels of energy debt.

The data shows that in quarter 1 2023, people disconnected from their energy supply more than 5 million times. Almost 1.2m customers were affected with over 800,000 bill-payers disconnecting for more than three hours.

Meanwhile, official energy debt levels have also surged.

The average household energy debt for homes not on a payment plan, is £1,214 on electricity bills and £965 on gas bills. Figures from the Money Advice Trust suggest that this “bad debt” is just the tip of the iceberg.

A spokesperson for the End Fuel Poverty Coalition commented:
“This is exactly what we have been fearing. As Bank of England figures show, people have burned through savings just to keep up with essentials and the cost of living crisis continues. Meanwhile average energy debt is surging to unprecedented levels

“It’s clear that households are just unable to cope.

“The majority of this debt is caused by the record high energy prices which have caused misery for millions, but generated excess profits for the firms involved in Britain’s broken energy system.

“Rather than end the Windfall Tax early, as the Government plans to do, it should instead look at how this could be used to help get those people suffering back on an even keel.

“Calls to introduce a Help to Repay debt matching scheme are backed by a range of charities. These plans would help reduce levels of fuel poverty as well as helping wider household finances.”

The figures come as the Ofgem Price Cap brings the average annual energy bill to customers down to around £2,074 from 1 July 2023. The Price Cap affects 29 million customers on standard variable tariffs (SVTs), including around 4 million customers on prepayment meters (PPMs).

Despite a slight reduction in bills from 1 July 2023, these customers will have energy bills that are double what they were in 2020 and 60% above what they were before the invasion of Ukraine.

This means that customers will continue to pay similar amounts for their energy as last winter, but with people having less ability to pay as the cost of living crisis continues.

Call for Help To Repay scheme as energy bills debt soars

An estimated 5.5 million UK adults are now in energy bills debt, according to new research from the Money Advice Trust.

The latest findings confirm the heavy toll that high energy bills are taking on household finances with 2.1 million more people in energy arrears in April 2023 than in March last year and millions struggling to access help from their energy suppliers.

The figures are also more than previous data from the Warm This Winter campaign suggested earlier this year.

In the wake of the research, the End Fuel Poverty Coalition has joined forces with Money Advice Trust, StepChange Debt Charity, Warm This Winter and other organisations to ask the Secretary of State for Energy Security and Net Zero to set up a ‘Help To Repay’ repayment-matching scheme.

Campaigners believe this will provide a safe route out of debt for struggling households.

The Money Advice Trust research finds that millions more households were struggling with their energy costs in April than in March 2022, with support from energy suppliers – which is vital to help them repay arrears – proving difficult to access.

While support is available from energy providers for people who are struggling, an estimated 3.9 million people (7 percent) said they have not been able to access help for their bills after contacting their suppliers for support.

A further 3.2 million people (6 percent) reported not being able to get through and contact their supplier for help when they had tried to do so.

Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:
“Energy bills might finally be falling – but for millions of households, the effects of this cost of living crisis are already baked in. With more people falling behind on energy and other essential bills and millions facing unaffordable demands for repayment, we need urgent action to make sure everyone has access to a safe route out of debt.

“The government has already provided substantial support to help with the cost of living – but no-one should underestimate the scale of this continued crisis.

“The Help To Repay payment-matching scheme we are proposing will help those who otherwise will simply not be able to dig themselves out of the energy arrears that this crisis has created. And for those most in need, the government should introduce an Essentials Guarantee to link the rate of Universal Credit to cover the cost of essential goods like food and energy.”

A spokesperson for the End Fuel Poverty Coalition commented:

“Energy debt is surging to unprecedented levels and it’s clear that households are just unable to cope.

“The majority of this new debt is caused by the record high energy prices which have caused misery for millions, but generated excess profits for the firms involved in Britain’s broken energy system.

“Rather than end the Windfall Tax early, as the Government plans to do, it should instead look at how this could be used to help get those people suffering back on an even keel.

“Not only would this help reduce levels of fuel poverty now and into next winter, but it will also help wider household finances, ensuring people no longer have to cut back on essentials.”

Research by the University of Bristol has found only 26% of households have not had to take measures to cut back on spending and the majority of people are now taking steps to cut costs in one or more areas.

A third (35%) were not able to afford a healthy balanced diet at least once in the past month and one in five of those in serious financial difficulties had not eaten for a whole day at least three times during the last month.

Free, expert advice is available from charity-run services like National Debtline.

Help To Repay logo

Full detail of the Help To Repay proposal submitted to the Government can be read online: https://moneyadvicetrust.org/media/documents/Help_to_Repay_-_Energy_arrears_scheme_proposal.pdf

Rising energy debt creates mental health crisis for households

Energy debt is causing mental health anguish for millions, with Brits now facing a summer of misery in an attempt to get back into the black before next winter takes hold, according to new research. [1]  

The research commissioned by the Warm This Winter campaign found that more than a quarter of people (29%) are currently in debt to their energy companies. 

Over one in ten (12%) vulnerable households, such as the elderly and disabled, are now sitting on an energy bill debt of at least £250 each. A fifth (18%) of prepayment meter customers owe upwards of £250 each, with many owing more than £500. 

More than half (54%) of people in energy debt are worried that they won’t be able to save enough over the summer months to pay off the accrued debt, rising to 70% of lower income households. 

Close to a third of respondents (30%) in energy debt are experiencing anxiety as a result and 12% say worrying about it is now making them ill. Over a fifth (22%) of vulnerable householders are spending sleepless nights thinking about it.

To combat this, one third (33%) of people in energy debt are now being forced to sacrifice essentials, including not keeping up with household maintenance (18%) and skipping meals (17%). 

One in ten (12%) say they will have to use other forms of debt, such as a credit card or overdraft to help pay off their energy bills.

The Chancellor’s energy price cap extension has done little to alleviate consumers’ concerns, with 56% of Britons saying they are unhappy or very unhappy with the level of support with energy bills which will be available for energy bills from 1st April.

People affected by energy debt should initially contact their energy firm or Citizens Advice for help. Those concerned for their mental health can contact Mind.

A spokesperson for the End Fuel Poverty Coalition which is part of the Warm This Winter campaign, commented:

Combined household energy debt will top £2.7bn by the end of June this year and the Government needs to bring together industry and charities to find a solution to the problem.

People will be unable to repay this staggering amount and rather than passing on bad debt to other bill payers, as the energy firms suggest, the Government should use targeted debt relief to wipe out part or all of the energy debt.

This will help the most vulnerable move out of fuel poverty and boost the spending power of hard-pressed consumers.

On Saturday 1st April 2023, a mass lobby of politicians will see people around the country come together to demand change. Over 70 events have been arranged nationwide, including demonstrations and meetings with local MPs to highlight the breadth of public concern about the energy crisis. 

Heidi Chow, executive director of Debt Justice, said: 

Energy debt is having a devastating effect on millions of households who can no longer afford to properly heat their homes, cook meals, or operate medical equipment. 

By ignoring the problem of energy debt the government is needlessly prolonging the anxiety. It is time for them to get their heads out of the sand and tackle this unpayable debt in a fair way. 

In March, campaigners from Warm This Winter delivered a 400,000-strong petition to Number 10 Downing Street calling for the government to take decisive action now to fix our broken energy system, which has left seven million UK households in fuel poverty this winter. 

Tessa Khan, executive director of Uplift, added:

This government has provided temporary relief for some over the winter, but utterly failed to fix the core problem facing the UK, which is the unaffordable price of energy.

Household bills are still double what they were two years ago and high energy costs are making food and other goods more expensive.

It is beyond time that the government took real action to permanently lower energy costs, which means rolling out support to upgrade homes and accelerating the development of cheap renewable energy, both of which have huge public support.

Instead of handing billions of pounds in subsidies to profitable oil and gas companies, this government should be 100% focused on helping ordinary households and businesses.

To find out more and get involved, visit https://www.warmthiswinter.org.uk/mass-lobby.

ENDS

[1] Researchers interviewed 2,196 people between 20th and 21st March 2023. Results were weighted to be representative of the GB population. GB 18+ population is 51,435,642 (ONS) with around 4.5m experiencing anxiety as a result of energy debt.