Charities are ramping up calls on the Government for a “help to repay” scheme on power bills as research showed one in four households with energy debts is unable to repay arrears.
An estimated 6.4 million UK adults are now in arrears with their energy bills, up more than 824,000 since April, according to a survey for National Debtline, which is run by the Money Advice Trust charity.
It found that 24% of those with energy arrears are currently unable to repay, with more than a fifth (21%) also saying their supplier has not accepted an affordable offer of repayment.
Ahead of Chancellor’s upcoming Autumn Statement, the free debt advice service is leading a coalition of 13 charities calling on Jeremy Hunt to launch a dedicated government “help to repay” scheme for energy arrears, to provide repayment matching and the option to write off debts for people dealing with unaffordable arrears.
It comes after recent figures from industry regulator Ofgem showed consumer energy debts had reached a record £2.6 billion.
David Cheadle, acting chief executive of the Money Advice Trust, said: “High energy costs have left millions trapped in energy debt – and these households urgently need support this winter.
“The Government now has only a limited window of opportunity to act, which is why we are calling on the Chancellor to use the Autumn Statement to step in with the help people need.”
The research also revealed the difficulties those in energy arrears are facing, with 18% saying they are unable to get through to their supplier when they try to contact them to discuss the debt, and one in four (24%) regularly losing sleep because of worry over energy debts.
Charities are also warning that recent proposals by Ofgem to increase the price cap by £17 per household to stop suppliers from going bust due to soaring energy debts will only compound the problems.
Matt Copeland, head of policy and public affairs at National Energy Action, said: “Failure to provide support to reduce energy bills and energy debt would be catastrophic, leaving millions of households unable to stay warm and healthy this winter.
“A ‘help to repay’ scheme would accelerate debt payments, ease the burden on household budgets, and help create a more sustainable energy market.”
A Department for Energy Security and Net Zero spokesperson said: “We would encourage anyone worried about their energy bill to speak to their supplier. We are supporting the most vulnerable this winter by helping up to three million families with £150 off energy bills through the Warm Home Discount.
“This comes on top of £900 cost-of-living support for those in need – as well as nearly £40 billion provided last winter to cover around half a typical household’s energy bill.
“We continue to keep all options under review, while ensuring competition can return to the market to offer best value for all.”
– Opinium surveyed 2,000 UK adults between October 17 and 20.