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Consumer debt to energy suppliers rises to £507 million; Amber Rudd asks Big Six to lower prices

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Image credit: Images_of_Money via Flickr Creative Commons

UK consumers collectively owe energy providers £507 million, a 9% rise in debt levels from £464 million in 2014.

According to research undertaken by uSwitch.com, the average household energy debt now stands at £130. The research says that the increased energy debt of UK households is due to a colder winter, despite 54% of consumers stating that they took measures to keep bills down.

The news comes after the secretary of state for energy and climate change, Amber Rudd wrote to the ‘Big Six’ energy suppliers to ask them to lower their prices in order to reflect the drop in wholesale gas prices.  

While the UK’s major energy companies have reduced their prices, the average reduction represents a 2.2% reduction – falling someway short of the 25% reduction wholesale gas cost and 18% reduction in wholesale electricity costs.

Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “Pre-payment meters were forcibly installed in almost 100,000 homes last year due to debt, yet our figures suggest this could be just the tip of the iceberg. This is evidence that energy has become totally unaffordable for millions of homes. Disposable incomes may be on the up, but people are still under relentless pressure just to cover the cost of essential bills.

“Not only are more households in the red to their energy supplier, but the amount they owe has gone up, despite the recent price cuts. Energy suppliers must urgently pass on double-digit reductions to their customers – many of whom have admitted to going cold this winter in an attempt to keep their bills down.”

Rudd’s letter to the Big Six energy suppliers is reported to suggest that the energy companies should be working hard to regain UK consumers’ trust by reflecting the drop in wholesale energy prices in their bills.

According to uSwitch, 30% of consumers said that they were turning a blind eye to their energy debts, while only 19% said they could afford to pay off their debt in one lump sum.

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