Posted June 14, 2023
An estimated 5.5 million UK adults are behind on their energy bills, according to new research from the Money Advice Trust, the charity that runs National Debtline and Business Debtline.
The charity’s Under Pressure research – based on an Opinium survey of 2,000 UK adults and a comparison of data from previous polling carried out throughout 2022 – lays bare the worsening impact the high cost of living is having on households across the UK.
The latest findings confirm the heavy toll that high energy bills are taking on household finances, in particular, with 2.1 million more people in energy arrears in April 2023 than in March last year and millions struggling to access help from their energy suppliers.
In the wake of the research, the Money Advice Trust, StepChange Debt Charity, National Energy Action, Scope and ten other organisations have written to the Secretary of State for Energy Security and Net Zero calling for a ‘Help To Repay’ repayment-matching scheme to provide a safe route out of debt for struggling households.
High energy bills are taking a toll
The research finds that millions more households were struggling with their energy costs in April than in March 2022, with support from energy suppliers – which is vital to help them repay arrears – proving difficult to access.
- An estimated 5.5 million people (1 in 10 UK adults) were behind on their energy bills in April – an increase of 2.1 million compared to March 2022.
- While support is available from energy providers for people who are struggling, an estimated 3.9 million people (7 percent) said they have not been able to access help for their bills after contacting their suppliers for support.
- A further 3.2 million people (6 percent) reported not being able to get through and contact their supplier for help when they had tried to do so.
Wider household finances under pressure
Since March 2022, the number of UK adults who are behind on one or more household bill has risen by 7 percentage points from an estimated 7.9 million to 11.6 million people. Certain groups are also more adversely impacted.
- A fifth (21 percent) of people in receipt of means-tested benefits, such as Universal Credit, have gone without food in the last three months.
- 50 percent of people unable to work due to long-term illness or disability said money worries are impacting their health.
- Compared to the general population, the proportion of people turning to food banks due to rising costs almost doubles to 1 in 10 amongst people from a black African or Caribbean background.
Unaffordable demands for repayment
Amidst worsening household finances, millions more people have been subject to debt collection activity – with many facing unaffordable demands for priority debts such as council tax and energy arrears.
- More than a quarter (26 percent) of people behind on their council tax said they have received demands for repayments at levels they cannot afford.
- An estimated 3.2 million people have received demands from their energy supplier for repayments of arrears that they cannot afford.
- An estimated 2.2 million people on low incomes have had money deducted from their benefits to repay debts – and more than one in four (27 percent) said they have fallen behind on other bills as a direct result.
The charity’s findings indicate strong public backing for additional support to help households who are struggling with high costs - three quarters of UK adults (73 percent) think additional support should be given to people dealing with energy arrears and the same proportion (74 percent) think people should be given more time to repay government debts in a way that is affordable.
To support the recovery of the hardest hit households, the Money Advice Trust is joining other charities in calling for:
- A dedicated government ‘Help To Repay’ scheme for energy arrears, to provide repayment matching and the option to write off energy debts for people dealing with unaffordable arrears.
- Urgent reform of government debt collection practices to ensure safe routes out of debt, with affordable and fair repayment options available to all.
The charity has also joined the Joseph Rowntree Foundation and more than 90 other charities in calling for an Essentials Guarantee to link the rate of Universal Credit to the cost of essential goods including food and energy costs.
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:
“Energy bills might finally be falling – but for millions of households, the effects of this cost of living crisis are already baked in. With more people falling behind on energy and other essential bills and millions facing unaffordable demands for repayment, we need urgent action to make sure everyone has access to a safe route out of debt.
“The government has already provided substantial support to help with the cost of living – but no-one should underestimate the scale of this continued crisis.
“The Help To Repay payment-matching scheme we are proposing will help those who otherwise will simply not be able to dig themselves out of the energy arrears that this crisis has created. And for those most in need, the government should introduce an Essentials Guarantee to link the rate of Universal Credit to cover the cost of essential goods like food and energy.
“Free, expert advice is available from charity-run services like National Debtline – and it’s never too early, or too late, to seek advice if you are struggling to cope.”
National Debtline provides free, independent debt advice at www.nationaldebtline.org.
The research and production of the Money Advice Trust’s new report, Under pressure: Tracking the impact of the high cost of living on UK households, was conducted with support from JPMorgan Chase.