Energy suppliers slammed as the number of households in debt rises to more than 2million
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THE number of households in debt to energy suppliers has soared past 2million as a damning new report slams power companies for being too slow to help.
New research by Ofgem reveals the number of electricity customers in debt last year increased by 4.2 per cent to 1.31million, and by 4.8 per cent to 1.05million for gas customers.
Suppliers are bound by Ofgem rules to help customers manage debt if they are struggling to make payments, including by putting them on an affordable repayment plan.
This can also involve installing a prepayment meter but Ofgem states this must only be done as a last resort.
A prepayment meter is a device that uses a pay as you go tariff so customers pay for their energy before they use it.
But suppliers have been criticised by Ofgem for not moving quickly enough to respond to indebted customers, despite the debt level rising.
How to find a cheaper deal
YOU won’t know if you’re on the cheapest energy deal until you see what else is on offer.
Comparing prices is the only way to make sure you’re getting the best value for money and it could just save you hundreds of pounds a year.
Here’s how you do it:
- Before you start comparing, you’ll need your latest bill to hand. This will include all the important details you’ll need to shop around, including the name of your provider and how much you’re paying.
- Customers can use websites such as or to compare tariffs and find a cheaper deal.
- Here you’ll need to fill our your personal details so the websites can start comparing prices.
- If you find a better deal, be sure to tell your current provider all about it.
- Haggling doesn’t cost a penny and while no means a sure fire way to get them to lower their prices, it has proved successful in securing a better deal for households.
- If they can match or beat the price you found online, then you’ve managed to save yourself some money.
- If not, then you can switch to the cheaper deal you found elsewhere.
- You can also sign up to MoneySavingExpert’s Cheap Energy Club for free alerts on when cheaper deals become available.
The number of customers on repayment plans rose by 1 per cent for electricity to 661,339 and by 0.4 per cent for gas to 543,520 last year.
But the amount of families in debt that weren't on a repayment plan went up by 8 per cent for electricity customers (to 648,000) and by 10 per cent for gas customers (to 505,000).
Ofgem fears that suppliers could push struggling families further into debt if they don't act sooner.
However, energy companies have been praised for offering more support for vulnerable customers.
In the past year, the report found over 850,000 free services were provided by electricity companies, while 650,000 free acts of assistance were recorded for gas customers.
This marks an 8.5 per cent and 4.4 per cent rise respectively, with help ranging advice on from managing everyday energy usage, to providing braille or large print bills.
Ofgem said there is no set criteria for who qualifies as vulnerable and said it can be anything from illness to disability, to a sudden change like losing a job.
How to get out of debt
RECORD numbers of Brits are seeking help to manage their debt.
While getting back on track can seem like a daunting task, we've taken a look at what you can do to help you on the way.
Get help for free: There are lots of groups who can help you with your debts.
- Citizens Advice - 0808 800 9060
- StepChange - 0800 138 1111
- National Debtline - 0808 808 4000
Don't ignore bills: Ignoring your bills won't make them go away, as tempting as it may be, and the problem will likely escalate. It's best to tackle debt head on by working out exactly what you owe and when you need to pay it back.
Make a budget: Once you know what you need to pay back, it'll become easier to prioritise your finances. The next step is to create a detailed budget so you can see how much you have going in and going out. Use an online tool like one from to help you do this.
Switch and save: Households can save hundreds of pounds by checking if they can get a cheaper deal elsewhere. In fact, MoneySavingExpert says families can save £330 on average by switching from Standard Variable Tariffs (SVTs) to a better rate. Use a comparison site like or to see what deals are available.
Get a balance transfer card: If you're paying interest on your credit card balance, this can ultimately add to your debt pile. A better option could be getting a 0 per cent balance transfer card. These types of card will let you transfer an existing balance to a new card and gives you the chance to clear it fully without incurring interest. will let you know what deals you will likely qualify for. You'll need to have a good credit rating to qualify for one.
See if you're entitled to benefits: It's important to check if you're entitled to any extra benefits or tax credits if you're struggling financially. can help you see what help is available and there's a benefits calculator on the website. Help ranges from tax credits, job seeker's allowance and universal credit.
Also consider: You can find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the and on the Government's But make sure you know exactly what you're signing up to as these plans aren't suitable for everyone. Many firms charge a fee for the service, either upfront or one that's incorporated into your monthly payments.
The number of prepayment meters forcibly installed by suppliers to collect a debt fell by 15 percent to 71,000.
It comes after Ofgem introduced new rules in 2018 to encourage suppliers to cut down on prepayment meters being installed by force.
Energy suppliers must make sure the installation of a prepayment meters is appropriate for the customer.
Mary Starks, executive director for consumers and markets at Ofgem said: “Some suppliers are simply not keeping up with the rising numbers of customers who owe them money.
“It’s imperative that suppliers move quickly and efficiently to help struggling customers manage paying back their debts, or risk pushing them further into hardship.”
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A spokesperson for Energy UK, which represents energy suppliers, said: “The energy sector is committed to improving services for all customers including those in most need, which is why we set up the independently-Chaired Commission for Customers in Vulnerable Circumstances.
“We have committed to bringing forward a new Code of Conduct to build on the Commission’s report and existing voluntary initiatives and will work closely with Ofgem on how we can improve services further for customers.”
MORE ON MONEY
Last week a StepChange report revealed how families are being crippled by debt with the charity receiving 331,337 cries for help in the first half of 2019.
While the National Housing Federation estimates 2.5million people can’t afford their rent or mortgage.
Back in July, it was revealed that half a million working families rely on housing benefit to pay their rent.
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