UK households were facing record energy debts even before the price cap was increased

Household energy debt had reached £2.1bn before the April price hikes

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The amount of energy debt owed by UK households had reached record levels even before energy price rises began kicking in from April 2022. That’s according to new analysis by campaign group Debt Justice.

According to Debt Justice, the latest data from energy regulator Ofgem shows that the total energy debt owed by households grew from £1.5bn to £2.1bn in the twelve months to April 2022 – a 38 per cent increase.

In April, the price cap was raised by 54 per cent, reaching £1,971 for the average household. Given the data analysed by Debt Justice wholly predates that rise, it indicates that many people were already struggling with their bills long before the recent bill increases.

It also raises further questions about the government’s handling of the cost of living crisis. Energy bills are set to rise to £2,500 for the typical household in October. Earlier this week, Liz Truss announced the government will be freezing the cap at that level for the next two years. But with energy debts already rocketing well before this crisis – the government’s plan increasingly appears insufficient.

Heidi Chow, Executive Director at Debt Justice called for the government to write off energy debt. She said, “Astronomical energy bills are exacerbating Britain’s household debt crisis. The government cannot afford to ignore record levels of energy debt that will drive even more poverty and hardship for years to come. Liz Truss’ plans must include action to cap energy prices and write off energy debt to give everyone a fighting chance of keeping the lights on this winter.”

Chris Jarvis is head of strategy and development at Left Foot Forward

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