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Tips to clear energy debt and make savings

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More Britons are falling into energy debt as household bills have increased in recent months, with everyday costs continuing to increase.

Energy bills for millions of people went up in April when the monthly instalments from the £400 energy bills discount came to an end.

A typical household pays on average £2,500 a year with consumers protected from the higher market price of energy by the Government’s energy price guarantee.

Bills are set to go down from July as the cap on the market price of energy, set by Ofgem, is to drop to £2,074 for the average household.

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But many other household bills went up in April, including water bills, council tax and broadband and mobile tariffs, meaning those who have been forced into energy debt may be struggling to repay the amount they owe.‌

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Phil Foster, CEO of Love Energy Savings, said: “Every penny counts these days and Brits can help drag themselves out of energy debt by making savings in other areas.

“That means stripping back the supermarket spend, canning unnecessary subscriptions, and sticking to good habits around the home regarding energy use.

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“People could also look into what else they’re entitled to in terms of benefits and tax relief. Ask yourself what are your essential outgoings, cover those first and hopefully there’s some leftover for the nice to haves but make an informed decision.”

Reducing spending at the supermarket is particularly important as prices for everyday staple foods continue to increase.

Previous figures from Kantar suggested rising food prices could add another £830 a year to a household’s groceries bills.

Rebecca Armstrong, managing director of Making Energy Greener, listed several things people can do to reduce their debts. She suggested:

  • Set up a realistic budget to monitor their income, expenses, and prioritise their debt payments
  • Contact energy provider to discuss a manageable repayment plan or inquire about more affordable tariffs
  • Implement energy-saving measures at home, such as using energy-efficient appliances, insulating their property, and adopting energy-saving habits such as turning off lights when not in use, using a programmable thermostat, etc
  • Seek assistance from debt advice services to explore available financial support options and create a tailored debt management plan.

She added: “I would encourage anyone reading this article to contact their supplier or local council and request access to the ECO4 energy efficiency scheme – insulation and free boiler upgrades, renewables are all installed for free for eligible customers and will make a massive difference to the customers annual bill savings.”

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Many suppliers have funds available offering grants and other support to those who are in energy debt, including EON, EON Next, EDF and Octopus.

British Gas Energy Trust recently reopened its Individual and Families Debt Write Off Fund, which is open to all Britons, with no need to be a British Gas customer to apply.

A person has to have sought professional money advice before they send in an application for the support.

They must be seeking a grant to clear an outstanding debt for a current gas, electricity or dual fuel account.

The account must be in their name or in the name of a member of their household, and it must relate to their main residence.

Jo Allen, utilities customer experience expert at Pegasystems, said the energy suppliers have an “important part to play” in helping people get out of energy debt.

She said: “Energy suppliers must be taking a more proactive approach to spot signs of financial distress and build up financial resiliency before the problem snowballs into something much worse.

“They must ensure that they understand each customer on an individual basis to deliver personalised support to help reduce the risk of unnecessary hardship.”

For the latest personal finance news, follow us on Twitter at @ExpressMoney_.

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