Households owe £1.3bn to energy suppliers ahead of winter bill hikes

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Total debt is already three times what it was a year ago, according to analysts at Uswitch, and is expected to rise even more over the winter.

Six million UK households owe their utility company an average of £206 (Photo: Adobe)

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Six million UK households owe their utility company an average of £206, according to a survey by the company. In April the same average debt was £188.

Regulator Ofgem is expected to raise the price cap on energy bills for the average UK household to £3,582 a year from October, according to a new forecast.

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Analysts at Cornwall Insight were forecasting further increases to £4,266 in January, with the average household paying £355 a month, followed by a further rise to £4,427 from early April.

Justina Miltienyte, Head of Policy at Uswitch, said: “Energy debt has reached an all-time high at the worst possible time, making this winter’s energy price hike an extremely precarious situation for many households.

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“This is an alarming situation as summer is traditionally a time when homes use less electricity for heating, helping billpayers build up energy credits ahead of winter.”

The survey also revealed that eight million households have no credit and therefore no cushion against winter costs.

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Almost one in five (18%) said they were concerned that their provider would force them to take a prepayment meter if they defaulted on bills, while 38% said they were unaware their provider was doing this could.

Ms Miltienyte added: “If you are behind on your bill payments or have debt on your energy account, speak to your provider as soon as possible.

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“They should be able to help you find a solution, e.g. B. when working out a more favorable payment plan. You may also be eligible for additional assistance such as hardship funds and other energy assistance programs.

“Government must also take pre-winter energy debt seriously – and a larger support package for vulnerable households must be agreed as a priority.”

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Energy bosses in crisis talks

Energy sector chiefs are set to take part in crisis talks with Chancellor Nadhim Zahawi and Business Minister Kwasi Kwarteng as the price cap is expected to hit more than £4,200 in January.

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It follows widespread anger at Shell, BP and British Gas owner Centrica, who announce record financial results as households grapple with mounting bills.

Gas and power industry executives are expected to meet with Cabinet ministers on Thursday morning (11 August) when bosses are asked to present a breakdown of expected profits and payouts, as well as investment plans for the next three years.

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The Government has already pledged £400 to every household and extra aid for the most vulnerable and energy bills have become a focus of the Tory leadership campaign.

Money Saving Expert’s Martin Lewis urged Liz Truss and Rishi Sunak to tackle the issue together after warning the country was facing a “national catastrophe”.

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He said the “zombie government must wake up sooner than September 5” when the new Tory leader and prime minister is announced, as forecasts of the new Winter Law are “unaffordable for millions”.

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