Energy bill alert: Woman trapped in £2,000 energy debt | Personal Finance | Finance
[ad_1]
Many households are in debt to their energy supplier which puts them in further difficulty when it comes to paying their bills. Britons are currently experiencing an unprecedented rise in energy bills compounded with an increase in inflation as the cost of living soars. Despite the Government’s announcement of an energy price guarantee next month, some households are stuck in energy debt of up to £2,000.
According to research carried out by Debt Justice, the UK’s total figures for household energy debt reached a record high before the initial energy bill rise in April 2022.
Using data from energy regulator Ofgem, the group revealed that total debt owed by households rose to £2. billion in the twelve months to April 2022 by 38 percent
As a result, Debt Justice is urging the Government to cap energy prices and pay off energy debt by expanding the windfall tax on energy suppliers.
While energy bills are due to be capped at £2,500 as of next month, the Government has ruled out imposing a windfall tax on providers.
READ MORE: Entirely free way to save £195 a year on your energy bills – clever money saving hack
Louisa, 39 from south London, shared how energy debt is pushing her family into further poverty during the cost of living crisis.
She said: “I am already paying back over £2,000 of gas debt and at this rate it will take another four years to pay it off. During this time, I can’t move to a cheaper supplier.
“My electricity bill has already jumped from £40 a month to around £60 to £70 and 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.
DON’T MISS
“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.”
Heidi Chow, the executive director at Debt Justice, emphasises how the UK’s ongoing debt issues are exacerbating the rise in the cost of living.
Ms Chow explained: “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.
READ MORE: Britons in higher bracket can do 2 main things to reduce tax payments
“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.”
What is the energy price guarantee?
Last week, Prime Minister Liz Truss outlined the Government’s new energy price guarantee plan.
Through this initiative, an average energy bill for a typical household will be no more than £2,500 a year for the next two years.
This is set to be introduced at the beginning of October at the same time the energy price cap was set to hit £3,549 for those on typical use.
Despite this support, energy bills are still expected to exceed the current price cap next month.
Ms Truss said: “Decades of short-term thinking on energy has failed to focus enough on securing supply – with Russia’s war in Ukraine exposing the flaws in our energy security and driving bills higher. I’m ending this once and for all.
“I’m acting immediately so people and businesses are supported over the next two years, with a new energy price guarantee, and tackling the root cause of the issues by boosting domestic energy supply.
“Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again.”
[ad_2]
Source link
