The average person in debt and suffering fuel poverty owes just over £15,000, a new survey has indicated, a figure large enough for individual v…
The average person in debt and suffering fuel poverty owes just over £15,000, a new survey has indicated, a figure large enough for individual voluntary arrangements (IVAs) to be considered.
Research by the Consumer Credit Counselling Service (CCCS) indicated that a third of people in debt approaching it in the first half of this year were also in fuel poverty – defined as where over ten per cent of a household's income is required to pay energy bills.
It said that for this group, the typical monthly fuel bill was £136 out of an income of £847, worsening a debt burden that widens by £302 a month on average.
As a result, the mean unsecured debt level for those in this category has soared to £15,759, the organisation revealed.
Taking an IVA may be a wise option as it can reduce monthly payments, lead to interest being frozen and ensure that after five years or less all remaining debt will be cancelled.
One reason this may be considered by those in fuel poverty is that the situation could get worse, since the statistics refer to the period before the current round of fuel price hikes.
Commenting on this, CCCS director of external affairs Delroy Corinaldi remarked: "The finances of people in fuel poverty are already significantly overstretched – and we are extremely concerned that the current round of energy price rises could plunge them even further into debt."
E.ON and Scottish and Southern Electricity impose their increases this week and speaking earlier this month about their move, director of consumer policy at uSwitch.com Ann Robinson said: "Families are coming under financial pressure from every direction and these price hikes as we head into winter are going to push some even closer to the edge."
Posted by Paul Thacker