Britons’ energy bill debts soar to £2.1bn ahead of price hike

Liz Truss must ‘write off’ arrears to help struggling families survive winter, campaigners demand

The government has promised to cap prices at £2,500, but many households are already in debt (PA)

Britons struggling to afford to heat their homes and keep the lights on have accumulated more than £2bn in energy bill debt, the latest annual figures show. Gas and electricity bill arrears rocketed by just over a third, from £1.5bn to £2.1bn, in the year to April 2022 – just before the spring price-cap rise kicked in.

Liz Truss has promised to cap annual household energy bills at £2,500 for two years, after setting out a plan for the government to subsidise the big suppliers’ increased wholesale costs. But the Debt Justice campaign group – who produced the analysis based on the latest data from Ofgem – said many people were struggling to cope with already “astronomical” bills on top of rising living costs.

Calling for Ms Truss to “write off” existing energy debt, executive director Heidi Chow said: “The government cannot afford to ignore record levels of energy debt that will drive even more poverty and hardship for years to come.”

The Debt Justice campaigner added: “Liz Truss’s 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.”

The energy price cap was raised by 54 per cent to £1,971 in April, pushing up energy costs over the summer and adding to the pressure on families struggling to cope with soaring inflation.

Though Ms Truss has vowed to cap October’s price rise until 2024 and maintain the £400 discount promised for all UK households, annual energy bills will still rise 26 per cent when they are allowed to go up to £2,500 next month.

Debt Justice has joined Labour and the Liberal Democrats in calling on the government to freeze current energy prices, and to expand the windfall tax on the big energy producers, arguing that this could enable the government to write off household debts.

Louisa, a 39-year-old from south London, said she was already paying back over £2,000 of gas debt. “At this rate it will take another four years to pay it off,” she added.

She said her family’s electricity costs had jumped from £40 a month to around £60 to £70 in recent months. “I’m having sleepless nights. My anxiety gets worse every time my bills are due, as I fear I won’t be able to make ends meet,” she said. “A £100 grocery shop now only lasts us one week, when it used to last two. Writing off this gas debt would make a real difference to my family this winter.”

Ms Truss has said she will not “give in” to opposition calls for a new windfall tax, with the estimated £100bn cost of extending the £2,500 price cap expected to be met mostly through extra borrowing.

No 10 has said it does not believe the 10-day mourning period for the Queen will have any impact on the implementation of the policy, since officials will continue to work on the details and MPs are not required to pass legislation.

But chancellor Kwasi Kwarteng has only a narrow window to reveal the details of the package, between the Queen’s funeral on 19 September and the beginning of conference recess on 22 September.

The prime minister’s official spokesperson suggested that a statement setting out the fiscal details would be given next week, telling reporters: “We are still planning to deliver a fiscal event this month.”

It is not believed that legislation needs to be passed in order to bring the new energy price guarantee into effect for households, although businesses are still facing a wait for details about the promise of “equivalent” support for a six-month period.

“There isn’t a date set for the business support element of the guarantee. Obviously we’re working that through. It hasn’t been impacted by the mourning period, as I understand,” the PM’s spokesperson said.