Friday 2 May 2014
Energy industry in debt chaos?
Energy companies owe cash to "millions" of gas and electricity consumers but just as many people also owe power providers "millions of pounds".
A confusing picture has been painted as two comparison websites released contrasting research on debt in the energy industry - suggesting both sides owe cash to one another.
A Gocompare survey claims half of gas and electricity customers are owed an average of £90.20 in overpaid bills while more than a quarter (29%) have a credit balance of more than £100 – showing energy companies are banking a staggering £1.2 billion.
Jeremy Cryer, Energy spokesperson from the switching comparison site said: “While direct debits can help to smooth out seasonal variations in energy usage, if the estimated usage has been set too high, a large surplus can quickly build up, especially over the summer when consumption tends to be lighter.
“It’s also likely that your direct debit payment has been set too high so give a current meter reading and ask for your future direct debit payments to be reduced if possible.”
[caption id="attachment_73774" align="aligncenter" width="575"]
Source: GoCompare & uSwitch[/caption]
However research from uSwitch claims around four million consumers - or 14% - are in debt to energy suppliers.
It suggests they owe £128 on average - £5 more than last year - and have collectively racked up an estimated £464 million.
The rise is as a result of household energy bills £53 a year higher compared to the beginning of last year, with the average bill currently standing at £1,265 a year, uSwitch claims.
Ann Robinson, Director of Consumer Policy at uSwitch said: “Millions of households are in debt to energy suppliers and the amount they each owe has risen. This is a clear indication of the extreme pressure families are under to meet the rising cost of energy.
“Those in energy debt can face a catch-22. Despite knowing they could reduce their bills by moving to a cheaper energy plan, many see debt as a barrier to switching.”
