Over five million low-income households have no energy credit heading into winter

Over five million low-income households have no energy credit at a time of year when it’s important to have built up funds to cope with higher winter bills.

That is according to new research from Uswitch.com, the comparison and switching service.

It found that one in ten homes (11%) with a household income of less than £20,000 a year already owe money to their energy supplier ahead of winter, with indebted homes owing £163 on average.

Typically, customers should build up energy credit during the summer so they have a cushion to help them get through the coldest months.

However the nationwide picture shows a slight improvement, with only 8% of households – 2,400,000 – in energy debt going into winter, compared with more than 11% – or 3,200,000 – last year.

Households’ energy bills have dropped over the last two years, with the energy default tariff falling from £2,500 for average annual consumption in January 2023 to £1,568 in July this year, before rising 10% in October 2024 to £1,717.

But bills still remain high compared with before the energy crisis, with the cost-of-living crisis adding pressure to household budgets on multiple fronts.

The average energy debt per household is £179, down 17% from last year’s figure of £216. However, the average household energy account balance is £128 – the lowest level in three years.

Nearly three-fifths of UK households (59%) have a credit balance, with the average pot standing at £220 – down slightly from £236 last autumn.

Overall, nine million households have no energy credit going into winter, a slight reduction in the number from last year.

Despite the overall situation improving for the majority, a third of those in debt (32%) say their arrears are higher than last year, and one in ten households (12%) say they have moved from credit to debt.

Across the nation, two-fifths of households (43%) are more worried about paying their energy bill this year than they were last year[4].

Ahead of the Autumn Budget on 30 October, Uswitch is calling on the Government to consider additional measures to protect vulnerable consumers this winter.

Uswitch.com has relaunched its eligibility guide to help households see what support schemes they might be entitled to. Customers struggling with their energy bills are also encouraged to contact their supplier who will have a hardship fund, which could cancel some or all of the customer’s energy debt.

Richard Neudegg, director of regulation at Uswitch.com, said: “Households use more energy over the winter, so for the majority paying via direct debit it’s ideal to have a cushion of about two months’ worth of energy credit at this point in the year.

“It’s worrying that five million of the lowest-income households are going into winter with no buffer against higher bills.

“If your energy account is going into debt or you are behind on your bill payments, speak to your supplier as soon as possible.

“Our eligibility guide is a quick and easy way to see if you might be entitled to additional support such as hardship funds and other energy help schemes.

“While it’s important that vulnerable customers can access the help already out there, we urge the Government to consider what more could be done for those most in need.”