Cost of living crisis sees household energy debt triple in 10 years

British family power indebtedness has tripled successful a decade arsenic cost-of-living pressures push families into arrears connected privilege bills, according to a report.

The number of customers falling down connected their electricity bills pinch nary repayment scheme successful spot has much than tripled from 300,000 successful 2012 to much than 1 cardinal astatine nan extremity of 2024, pinch nan number of customers falling down connected their state measure besides tripling from 300,000 to 900,000 complete this period, according to Resolution Foundation research.

The Money On My Mind study suggests that affirmative trends among debased to middle-income households included accrued redeeming and falling in installments paper debts.

But caller financial worries for families included rising power indebtedness and assembly taxation arrears “that request to beryllium addressed”, it said.

The study said nan poorer half of nan 13 cardinal working-age families successful Britain still struggled to save, pinch much than two-in-five having little than £1,000 successful disposable savings.

But nan mean magnitude owed by each these families had fallen from £2,617 successful 2006-08 to £2,256 successful 2020-22 – a real-terms autumn of 14 per cent.

Meanwhile, problem debts – specified arsenic falling down connected “priority” household bills specified arsenic power and assembly taxation – had accrued dramatically.

Since nan eve of nan pandemic, assembly taxation arrears successful England had risen by almost half, from £4.6 cardinal successful 2019/20 to £6.7 cardinal successful 2024/25.

Close to a cardinal energy and a cardinal state customers were now down connected their bills, and nan mean size of their debts had surged betwixt 2012 and 2024 from £500 to £1,600, while nan mean indebtedness for state roseate from £500 to astir £1,400.

These debts remained astir concentrated successful nan poorest 5th of income distribution, wherever almost one-in-five families (18 per cent) were down connected astatine slightest 1 privilege bill, nan study said.

The emergence successful arrears was principally driven by nan summation successful nan bills themselves, pinch families paying 50 per cent much for each portion of state they utilized than earlier nan power crisis.

Meanwhile, nan operation of dwindling assembly taxation support and rising bills had accrued its load connected nan poorest households.

The study calls for improved assembly taxation support and a societal tariff connected energy bills.

Felicia Odamtten, economist astatine nan Resolution Foundation, said: “Families’ financial resilience has been tested successful caller decades by a bid of financial shocks on pinch stagnating incomes.

“While families person impressively still managed to trim their in installments paper indebtedness and prevention a spot more, caller financial worries person emerged pinch arrears connected privilege bills skyrocketing.

“Tackling these financial problems will require further thief pinch privilege bills, specified arsenic improved assembly taxation support, and a societal tariff connected power bills. But each excessively often, deficiency of financial resilience is simply a consequence of deficiency of income and addressing this will mean fixing Britain’s dire grounds connected productivity and existent costs growth.”

Simon Trevethick, caput of communications astatine indebtedness kindness StepChange, said: “This investigation speaks to what our advisers spot connected a regular ground – that nan sheer weight of mundane costs is pushing households to nan brink.

“With complete two-in-five StepChange clients successful power arrears, averaging complete £2,300, this is 1 of nan astir pressing issues they face. For assembly tax, we spot accrued levels of harm arsenic nan consequence of indebtedness escalation and outdated threat of imprisonment loom ample complete those successful trouble – pinch mean debts topping £2,000.

“There are applicable steps consumers tin return – fixing your power tariff up of nan value headdress changes coming into effect, reducing power usage connected a regular ground if it’s safe for you to do so, and reaching retired to your power provider, section authority aliases a free indebtedness proposal supplier if you autumn into trouble aliases arrears.

“But these are sticking plaster measures for a overmuch deeper coiled that demands action from cardinal government. We request to spot a indebtedness alleviation strategy to reside historical power arrears, a basal overhaul of assembly taxation regulations – including nan extremity to imprisonment rules – and contiguous action from authorities to build family financial resilience.”