Money Wellness
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calendar icon04 Jun 2024

Energy debt is ‘trapping people in a cycle of misery’

Those in energy debt are being punished by a system ‘designed to trap them in years of misery’, according to new research by the Warm This Winter campaign.

The stats

A survey by the organisation revealed:

  • Two thirds (67%) of people in energy debt report it has caused them emotional distress.
  • Two fifths (42%) say they’ve had to eat fewer hot meals in order to cut down on energy usage.
  • More than half (52%) of people with a disability or long-term illness who are in energy debt have cut back on hot meals.
  • Nearly three quarters (74%) of people with a disability or long-term illness who are in energy debt say it has caused them emotional distress.

Energy companies often push people struggling with their bills to move to a prepayment meter (PPM). This means customers pay off part of their debt every time they top up their meter.

The research found those with energy debt on a PPM have higher levels of emotional distress (93%) than those paying by direct debit (58%).

This comes after the House of Commons Energy Security and Net Zero Commission heard one in five households in energy debt are turning to illegal money lenders to cover bills and everyday essentials.

PPM customers are even more likely to turn to illegal money lending, with 36% of PPM customers borrowing from loan sharks compared to 13% of those on direct debit.

Energy debt taking a serious toll

One participant in Warm This Winter’s research said they're forced to sit at home with the lights off and only put the heating on for one hour a day.

“What else can I do? My account should not be in debt for the amount I use. It’s disgusting and [energy firms] are making millions in profits,” they said.

Simon Francis, coordinator of the End Fuel Poverty Coalition said:

“Millions of households have fallen into energy debt due to the record-high prices.

“While the energy industry has pocketed the profits, struggling families have been abandoned.

“Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas. It’s time to end the punishment of energy debt.”

Fiona Waters, spokesperson for Warm This Winter, said:

“The next government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.

“All we have had so far from politicians are warm words that they understand the crisis. What we need are concrete promises of action.”

Is your supplier trying to force a prepayment meter on you?

Last year, the government told energy companies to stop forcing customers onto prepayment before trying to help them with their money difficulties.

Here are some things you can do if your supplier is pressuring you to move to a PPM:

Make sure your Direct Debit is reasonable

If your direct debit is too high, ask your supplier to explain how they’ve calculated the amount they want you to pay. If their reasoning doesn’t seem fair, you can ask them to change the amount.

Try to agree on a payment arrangement

Speak to your supplier to see if you can agree on a payment arrangement. Your supplier may be less likely to push for prepayment if they can see you’re actively trying to resolve the situation. 

Make part payments

If you’re able to, consider paying off part of your debt. Doing this shows that you’re doing your best, and makes your supplier less likely to try to move you to a PPM.

Find more advice on what to do if your supplier is pressuring you to switch to a PPM, along with information on your rights.

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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