About one million households in the UK are behind on their gas and electricity bills with no repayment plan, according to a new report from the Resolution Foundation. The thinktank found that between 2012 and 2024, average gas and electricity debts more than doubled to £1,400 and £1,600 respectively, from approximately £500 each.
The number of customers without a repayment plan for electricity bills has more than tripled from 300,000 in 2012 to over one million at the end of last year, while similar gas debts tripled from 300,000 to 900,000. The report attributes the rising debt to higher energy market prices following reduced Russian gas supplies before the invasion of Ukraine, with UK bills still around £600 a year higher than before the invasion.
Despite the increase in energy costs, consumer debt for higher-income households fell by 21% between 2006-2008 and 2020-2022, and by 14% for lower-income households over the same period. However, economist Felicia Odamtten warned that arrears on priority bills are soaring, calling for improved council tax support and a social tariff on energy bills.
Next week, energy bills are set to fall but a summer price rise is expected after Ofgem signalled it would raise the cap by 2% from October to £1,755 for a typical annual dual-fuel bill. Simon Trevethick of debt charity StepChange noted that four in ten UK adults cannot cover an unexpected £1,000 expense without increasing debt, and over two-fifths of their clients are in energy arrears averaging over £2,300.
A government spokesperson said they are delivering an energy system with stronger consumer protections and working to drive debt out of the system, including expanding the warm homes discount to over six million households this winter.
