Energy News

Energy price hikes force more people into debt

Thursday 15 September, 2011

By Martin Fagan - editorial@consumerchoices.co.uk

Burden of soaring energy bills force Brits even deeper into debt, says finance charity

The impact of energy price rises on struggling Brits is forcing them deeper into debt, the Consumer Credit Counselling Service (CCCS)

New figures from the charity revealed that almost a third of the people getting in touch were already in fuel poverty.

In the first six months of this year, 19,437 of the people seeking the charity’s help with their debts were in fuel poverty. With an average monthly income of £847 after tax, their average combined gas and electricity bill was £136 a month, or 16% of their total income.

The burden of their energy bill meant that these households were, on average, £302 short on their basic living expenses each month, said the CCCS, adding that this gap will widen even further if energy bills continue to rise.

This shortfall means that these households are not in a position to repay their debts, which average £15,759 in unsecured debt for this group of CCCS clients.

"The finances of people in fuel poverty are already significantly overstretched - and we are extremely concerned that the current round of energy price rises could plunge them even further into debt,” said Delroy Corinaldi, director of external affairs at CCCS.

"I would strongly urge anyone who is struggling to cope over the coming months to contact a free and impartial debt charity such as CCCS as early as possible."

In a separate study, new research by uSwitch.com revealed that 30 million Brits are throwing money down the drain by wasting energy, with 62% of consumers leaving their electrical items on standby.

Some 8% believed that as long as they weren’t using an item, it wasn’t using electricity, even if it was still plugged in and on standby.

uSwitch.com said the biggest drain on electricity bills was leaving your mobile phone to charge overnight, as being plugged in for an unnecessary seven hours wastes as much energy as watching a 32in LCD TV for 28 hours.

"Despite our increasing love affair with gadgets, consumers can no longer afford to throw money away by wasting energy,” said Kevin Sears, energy efficiency expert at uSwitch.com.

“Being more energy efficient is a simple and painless way to cut your bills, which will be a worry for many this coming winter.”