Households already in debt as energy bills rise

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A survey suggests that households are falling behind on energy payments with total debt three times higher than a year ago.

According to Uswitch, 26% of households owe over $200 on average.

People falling into debt should talk to their provider about a more affordable payment plan.

Cornwall Insight warned in October that energy bills could go up more than they thought.

The average household is expected to pay more in bills in January.

More than 47,000 people with energy debts have been helped by Citizens Advice. According to the charity, the average debt amount was more than $600.

Morgan Wild, head of policy for Citizens Advice, said that they hear from people who can't afford to cook a hot meal.

It won't be enough for people to manage these previously unthinkable price hikes after the government brought in targeted support.

The Chancellor and Business Secretary are going to meet with energy giants on Wednesday to discuss ways to ease the cost of living.

The first reason households end up in debt is because their direct debit payments are too low to cover the amount of energy being used.

If you find yourself in that situation, you should contact your supplier as soon as possible to make sure you don't get a bill shock.

People are not keeping up with their payments

The latest price cap - the maximum amount suppliers can charge customers for average energy usage in October - is due to be announced at the end of this month by the energy regulator Ofgem.

In addition to the group in debt, eight million households have no credit balances, which means they have no cushion against the bill rises this winter.

"This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter," she said.

She said it suggests the cost-of-living crisis is already squeezing budgets dramatically, even during the summer months, as families struggle with rising bills.

The priority of Ofgem is to protect consumers and make sure suppliers treat them fairly.

Making contact to identify if a customer is in payment difficulty, assessing repayments on a customer's ability to pay, and ensuring debt management activities are done in a fair and reasonable way are included.

When necessary, we take action.

If you're having trouble paying your bills, speak to your supplier who is obliged to offer payment plans and direct customers to available support. Ofgem will make sure this is provided.

The old advice to shop around for a better energy deal is no longer valid. Signing up for a fixed deal is not a good idea since the default price cap is the best rate available.

Let your supplier know that you are struggling if you are falling behind on your energy payments.

It's difficult to admit you're finding things difficult, however it's likely to be the best protection for your household this winter.

There is an extra layer of legal help available for people who are unable to pay so taking action is important. Agreeing a payment plan, giving temporary credit for prepayment customers, and arranging for payment directly through benefits are some of the things that are included.

They can't just cut you off if you make that call.

All households in England, Scotland and Wales will be given 400 to help with rising fuel costs.

The money is part of the energy bill support scheme.

A £650 payment will be made to more than eight million low-income households who receive means-tested benefits.

If they also qualify for that, the disabled will get £150.

The winter fuel payment is $300 for pensioner households. A low-income pensioner with a disability could receive a large amount of money.

The Warm Home Discount, which gives low-income households a £150 one-off annual discount on their electricity bill, is being expanded.

You should also talk to your supplier. The energy firms have hardship funds.

If you can't get a grant from your supplier, the British Gas Energy Trust may be able to give one to anyone in need.

Links to charities can be found on the Action Line.