Energy debts hit record high

The analysis, based on the latest data from the energy regulator Ofgem, reveals that total debt owed by households grew from £1.5 to £2.1 billion in the twelve months to April 2022, a rise of 38%. This was before the annual energy price cap was raised by 54% to £1,971.

The figures show that energy debts are already burdening households to an unprecedented degree as the cost-of-living crisis snowballs.

Debt Justice is calling on the government to cap energy prices and pay off energy debt by expanding the windfall tax on energy producers.

Despite government intervention energy prices are set to rise by another 26%, to £2,500, in October. This threatens to push millions more households into energy debt.  

Louisa, age 39 from south London said: “I am already paying back over £2000 of gas debt and at this rate it will take another four years to pay it off. During this time, I can’t move to a cheaper supplier. My electric has already jumped from £40 a month to around £60 to £70.”

Louisa continued: “A £100 grocery shop now only lasts us one week when it used to last two. Writing off this gas debt would make a real difference to my family this winter.”

Heidi Chow, executive director at Debt Justice said rising bills were: “Exacerbating Britain’s household debt crisis.”, adding that: “The government cannot afford to ignore record levels of energy debt that will drive even more poverty and hardship for years to come.”

Chow concluded with a message for the new Prime Minister, saying: “Liz Truss’ plans must include action to cap energy prices and write off energy debt to give everyone a fighting chance of keeping the lights on this winter.”