39% OF BRITISH HOUSEHOLDS FAIL TO PAY THEIR ENERGY BILLS

Sat 13 January 2024:

The number of British homes that failed to pay their energy bills surged by almost 40 percent compared with a year ago, figures from the Office for National Statistics (ONS) showed on Thursday.

The data released on Thursday showed that the total Direct Debit failure rate in December 2023 increased by 15 percent when compared to the previous year, indicating that households are still feeling the strain of the cost of living crisis, The Independent reported.

This was mostly driven by increases of 39 percent in the “electricity and gas spending category and 20 percent in the “mortgages” category, the ONS said.

Britons have had to contend with skyrocketing energy bills and mortgage rates over the last few years. Wholesale energy prices rose significantly after Russia’s military operation in Ukraine in February 2022.

Mortgage rates ballooned after the Bank of England increased interest rates to 5.25 percent in an effort to curb inflation which is also having a negative impact on Britons finances as the price of food has increased.

Despite energy wholesale costs coming down from their peak last winter, the price that Britons are paying is still significantly higher than before the price spike.

At the beginning of the year Ofgem increased the energy price cap by 5 percent from the previous £1,834 for a typical dual fuel household to £1,928. By comparison the energy cap was £1,277 per year in October 2021.

The rise was driven by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine, Ofgem said.

Ofgem Chief Executive Jonathan Brearley acknowledged that many people are currently having a “difficult time” and that “any increase in bills will be worrying”.

But he said the rise was a result of the wholesale cost of gas and electricity rising, “which needs to be reflected in the price that we all pay”.

The headline price cap figure is an average across households rather than an absolute cap on bills, so those that use more will pay more.

The rise puts hopes for relief from the cost-of-living crisis on hold, and follows Chancellor Jeremy Hunt making no mention of any further help from the government to offset household energy bills.

During the energy price spike of winter 2022/2023 households were given a one-off payment of £400 to help with energy costs.

Simon Francis, coordinator of the End Fuel Poverty Coalition, told The Independent, “Energy debt is already at record levels with around £3bln owed by customers.”

“This is through no fault of their own, but the debt is driven by energy prices that are still more than double what they were in winter 2020/21 and went up by another 5% on January 1, 2024,” he added.

“While households struggle in cold, damp, mouldy homes and struggle to pay their bills, Ministers are sitting on their hands,” he said.

“They refused to introduce an Emergency Energy Tariff for vulnerable households and have refused to set up an industry wide scheme to help people repay their energy debts,” Francis said.

It comes as Citizens Advice said it was helping record numbers of households with energy debt and seeing more people than ever who could not afford to top up their prepayment meter.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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