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Five million households in debt to energy supplier

The number of households in the UK that are in debt to their energy supplier has risen by over one million during the past twelve months, meaning that around one in five households are now in debt to energy firms.

This data was revealed by a study from comparison site uSwitch, within which it was also revealed that consumers owe an estimated £637m to energy firms, which equates to a 6pc rise on last year.

Out of the 2000 people who took the survey, 20pc admitted that they were in debt to their energy supplier, while the average debt stood at £123. This is expected to increase however, following price increases over the latter part of 2012 and an abnormally cold spring period which will have left people using increased amounts of energy.

Director of consumer policy at uSwitch, Ann Robinson, said: “The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the costs of their energy bills”.

The average price of a household energy bill has risen by two-thirds in the last five years, and now stands at approximately £1,400.

However managing the debt can be difficult and just over one in five people have said they turn a blind eye to it, hoping that over time the debt will decrease. About 20pc also said they would pay off the debt in a lump sum, while 45pc said they would increase their monthly direct debit premiums in order to reduce the debt.

In many cases this is the suggested method of repayment, as some energy companies actually offer a discount for consumer who do set up direct debits with them. It is essential to remember also that you should take regular meter readings to make sure that the estimated usage matches that of your actual usage and you are not overpaying.

If you have any questions related to this article, or any other financial queries, please contact one of our advisors who will be happy to help.

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