Energy Debt Extends To 5m Homes

9 April 2013

More than five million UK households are in debt to energy companies, a recent study has found.

The news comes as the Government continues to promote the Green Deal, its latest initiative attempting to patch-up ‘leaky’ Britain through energy efficient home improvements such as Cavity Wall Insulation.

The revelation also follows news that energy firm SSE has been hit with an extensive fine for breaching trading standards.

Energy Poverty on the Increase

The study – conducted by money-saving website, – polled 2,000 people about their current energy bills.

According to the results, one in five households is currently in debt to an energy company, an increase of 6% over this time last year. That equates to five million households, more than one million more than in 2012.

“The fact that a million more households have fallen behind in the last year tells us everything we need to know about the impact of sky-high energy prices,” stated Ann Robinson, Director of Consumer Policy at uSwitch.

“The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills.”

According to the report, the average energy bill now costs a household £1,353 per year, an increase of £100 over 2012.

Further findings demonstrated that £637m is owed collectively to energy companies. This compares to £478m one year ago. The increase of £159m represents a growth rate of 33%.

Putting a Lid on Energy Loss

With more and more of the UK facing the very real danger of fuel poverty, uSwitch is looking at the Green Deal for assistance.

“The important thing for households is to try to keep a lid on energy costs,” said Robinson. “There are two simple ways to do this — use less energy by making our homes more energy efficient perhaps by taking advantage of the Green Deal, and paying less for the energy we do use by switching to the most competitive tariff for our needs.”

Under the Green Deal, householders can apply for financial assistance with energy efficient home improvements. Grants and loans are available to cover the cost of Cavity Wall Insulation, Solid Wall Insulation, Loft Insulation, and more than 40 other measures.

Cavity Wall Insulation is estimated to make savings of up to £140 per year, while Loft Insulation can save up to £180 and Solid Wall Insulation £475.
Record Fine

Whilst the UK continues to struggle against rising energy prices, there was good news for consumer power this week.

SSE – formerly Scottish and Southern Energy – was handed a £10.5m fine at the beginning of April for what Ofgem called “prolonged and extensive mis-selling” to customers.

Amongst the offences carried out by the energy giant was promising larger savings than could be achieved as well as claiming customers would save more when they were actually switching to a more expensive tariff.

The £10.5m fine is the largest penalty handed out to an energy company in history.

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