Coping with the worry of energy debt
By Simon Read
Soaring gas and electricity prices have forced thousands of people to fall into the misery of energy debt.
The latest figures released by energy regulator Ofgem (21 January) reveal an alarming climb in the number of people falling behind with their energy bills.
The number of gas customers having to set up new debt repayment schemes to pay their bills soared by 21 per cent in the third quarter of last year, compared to the second quarter. Meanwhile the number of electricity customers getting into debt with their bills rose by 13 per cent in the same three month period.
It's hardly surprising that so many families are experiencing difficulties.
Apart from the number of folk who have lost their jobs or had their hours cut back during the recession, all energy users have been hit by higher bills as well.
By the turn of this year, average bills had climbed £327 since the beginning of 2008, despite widespread price cuts towards the end of 2009.
That extra £327 has obviously proved a few pounds too much for financially struggling families to cope.
Don’t cut yourself off from your bills
The good news is that energy companies are unlikely to cut you off these days. They know how important lighting and heating is, especially in the cold spells we've been having lately, and will not deprive people of such an essential.
In fact, just 636 electricity customers were cut off in the three months to last September and only 613 gas customers. But at the same time, that shows they will act if you make no efforts to repay the money you owe. The average amount electricity customers owe is £258, while gas customers owe £247, according to Ofgem.
Frighteningly, one in 10 gas and electricity customers in debt owes more than £600, which can be a frightening amount to try and repay.
But setting up a debt repayment schedule with your supplier is essential.
They shouldn't be unreasonable and should only ask you to repay what you can afford, such as a fiver a week.
Bear in mind that if you owed the average £258 on electricity repaying £5 a week would mean taking a whole year to clear the debt, so paying more if you can, will help you get out of debt more quickly.
At the same time, it's also helpful to take action to reduce energy bills.
Remembering to turn off lights and electrical appliances in your home when you're not using them will help cut costs. So avoid leaving TVs and DVDs on standby - they're still eating electricity and costing you money if you do.
If you can bear to turn down your thermostat by just 1 per cent, you could save around £50 a year on heating bills. And if you pay by cash or cheque, you could save by switching to direct debit.
Ways to keep your energy bills down
If you haven't switched supplier recently, that's certainly a way to save money, and if you look for a joint supplier for your gas and electricity, you could be offered an even better deal.
But if you still struggling to pay your energy bills, check and see if you’re eligible for cash to help. The government, energy suppliers and local authorities all provide grants to help you implement energy saving measures in your home.
If you're on benefits, for instance, you may be able to claim up to £3,500 to improve your heating and energy efficiency under the government's Warm Front scheme. The cash must go towards such things as loft insulation, draught- proofing and repairs to an existing heating system, or towards a new boiler.
These home improvements will help reduce the amount of heat wasted at your home and therefore cut the cost of bills.
You can get details of grants available to you at the Energy Saving Trust.