Energy debt reaches record levels

The tough economic conditions in the UK are currently being realised in the budgets of many households and in no place is this more obvious than the issues surrounding energy bills.

According to a new report from uSwitch.com, almost four million families are now in debt to their gas and electricity supplier – a figure which equates to 14 per cent of the British population.

The average amount British consumers now owe their energy company is £131, which is four per cent higher than at this time last year, but 15 per cent more than in 2008 before price rises were implemented.

This means that collectively, the UK public owes £478 billion on their gas and electricity and this figure could rise as the average utility bill is now £1,252, with many families struggling to find the money to pay the next bill.

Ann Robinson, director of consumer policy at the group, said the severe price hikes issued by all utility suppliers last year have left many billpayers reeling and now these pressures are really being felt.

"Although suppliers have cut their prices this year, the average reduction of £41 or 3.2 per cent doesn't come near the average increase of £224 or 21 per cent seen since the end of 2010 – as a result consumers will continue to struggle to pay their bills and debt will continue to grow," she stated.

Ms Robinson added that people should ensure that they are making savings where they can. Switching energy supplier, paying with direct debit and regularly checking meter readings can all help to keep costs down.

Consumers could also look to make further savings by initiating a debt management plan which could reduce outgoings in other areas, making more money available to deal with large unexpected bills when they drop through the letterbox.

By Amy White