1 in 4 Brits could default on energy bills from October

New research published today by the charity Citizens Advice shows predicted £145-a-month hikes to energy costs in October could mean one in four adults – equivalent to 14.5 million people – will be unable to afford their bill.

This is up from around five million saying they already can’t afford April’s price increase of £60-a-month. The charity included the government’s support measures in its calculations.

Two in five (41 per cent) of those warning they’ll be pushed into the red next month have already borrowed money to pay for essentials.

The stark findings come ahead of next week’s Spring Statement where the Chancellor has been urged to announce further support for families struggling to pay their bills.

Citizens Advice issued a ‘red alert’ warning last month as demand for its services soared. Its frontline staff are continuing to help record numbers access crisis support like food banks and one-off charitable grants amid the cost-of-living crisis.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “The Chancellor has a crucial opportunity to bring forward more support for those most in need in his Spring Statement next week. Increasing benefits in line with inflation, expanding the Warm Home Discount and announcing a more generous energy rebate should be top of his list.”

In February the Chancellor announced a £200 energy rebate which is anticipated to be paid into customers’ accounts in October and paid back over the following five years.

Citizens Advice found more than eight in 10 said that they did not think that the government’s loan would make a significant difference to their ability to pay their energy bills.

People using prepayment meters – many of whom are already on low incomes – are set to be hardest hit by rising energy prices.  They’re less able to spread the cost of their energy throughout the year and are at greater risk of being disconnected if they can’t afford to top up.

Rising energy costs could see an average family on a prepayment meter facing bills of £336-a-month – over £10 a day – in December 2022, when the same usage would have cost them £147 in December 2021.