Energy debt up by almost a quarter since 2023

Although energy bills have fallen recently, too many households aren’t feeling it and are continuing to struggle.

Many people are still repaying arrears built up during the pandemic and after Russia’s invasion of Ukraine sent prices soaring in 2022.

So even as headline prices stabilise, they have little flexibility in their monthly budgets.

And with the Middle East crisis threatening to drive up energy prices once again, people are bracing themselves for further strain on their budgets.

Households owe more than £2,000 on average

Average arrears have continued to rise over the last few years.

In fact, the average amount owed to energy providers now stands at £2,270.

That’s up from £1,848 in 2023-24 - an increase of 23%.

But significantly, it’s not just an issue that affects those on the lowest incomes.

Energy debt is a problem that affects a broad range of households.

And that points to wider structural affordability issues in the energy market, rather than a temporary spike in prices.

“Energy prices may have come down from their peak, but energy debt has not followed the same path,” said Rebecca Lamb, head of external relations at Money Wellness.

“Many households are still repaying significant arrears built up over recent years, and those repayments continue to put pressure on already stretched budgets.”

New energy price cap to be announced this week

The energy price cap - a limit on how much suppliers can charge per unit of gas and electricity - is set to be announced by Ofgem tomorrow (Wednesday 27 May).

And it could push bills up by as much as 13%.

“Even a modest increase in the price cap risks pushing some households into further difficulty, particularly where there is already outstanding debt on the account,” Rebecca commented.

What can be done to help struggling households?

We believe there are two meaningful ways to help families that are falling behind with their energy bills.

Firstly, a national social tariff, similar to the water scheme, should be introduced for energy.

Crucially, this should be automatically applied to eligible households, so people get support without having to apply for it themselves.

Secondly, we’d like to see more done to promote the support that’s already out there.

Many households are still missing out on support because they’re not aware of available schemes, while some are reluctant to seek help and put off by complex application processes.

Inconsistent provision between suppliers is another issue, with households in similar circumstances getting different levels of support depending on who they’re with.

This needs to change.

What can I do if I’m worried about my energy bills?

If you’re already struggling with your energy bills and worried about further increases, there are steps you can take straight away.

Speak to your energy supplier

Let your supplier know if you’re starting to fall behind with your payments and worried about how to pay your next bill.

They might be able to offer:

• grants
• payment plans
• advice on managing your account

It could also be worth joining the Priority Services Register - a free service that provides extra support to people who need help with their energy supply. 

Check what benefits you can claim 

You might be entitled to financial support from the government, so use our benefits calculator to find out what you could get, or give us a call and we’ll have a look for you.

It might be more than you realise.

Get help with your debts

If you’re feeling the pressure of debt, contact us for confidential, practical and impartial debt advice.

Try to save energy

Small steps like only using your washing machine when you’ve got a full load and taking shorter showers can make a big difference to your bills.

We’ve put together a list of 50 smart energy-saving tips to help you get started.

Create a household budget

Energy is just one essential cost that comes with running a household.

So make sure you know exactly how much money you’ve got coming in each month and where it’s going, so you can prioritise your spending and identify possible savings.

We’ve put together a guide to creating a budget to help you get started.