Days before an expected hike of the energy price cap, over a quarter of bill-payers (27%) say an increase of more than £10 a month could force them into debt[1]
One in ten households (11%) say they could not cope with any increase in bills[1], and almost a fifth of households (17%) have struggled to pay for their energy over the past 12 months[2]
Three fifths of bill-payers (60%) on Standard Variable Tariffs and prepayment meters are stressed by the thought of the price cap rising[3]
One in three households say their energy bills are higher than this time last year — up almost 5% on average[4]
A significant rise in the price cap is likely to be announced on Friday 6 August — causing a surge to household energy bills
Uswitch.com is encouraging households to switch now to a fixed deal to avoid market volatility and reduce bills.
Over a quarter (27%) of bill-payers say an increase of more than £10 a month in their energy bills could force them into debt[1], just days ahead of an expected hike in the price cap, according to Uswitch.com, the comparison and switching service.
Almost a fifth of households (17%) have struggled to pay for their energy over the past 12 months[2], and one in ten (11%) households say they could not cope with any increase in bills[1].
Ofgem is due to announce changes to the price cap on Friday (August 6), with a significant increase expected due to rising wholesale energy costs.
Customers on Standard Variable Tariffs (SVTs) and prepayment meters will be directly affected by any increase in the price cap. Three fifths of homes on these types of tariffs and meters say they are stressed at the thought of the price cap rising.
Concerningly, households in one of the lowest income brackets (£20,000 and under) say they spend 10% of their after-tax income on energy bills[5]. One in seven households (13%) earning less than £20,000 are also on prepayment meters - one of the most expensive ways of paying for energy - compared to just one in 50 (2%) of those earning more than £40,000[6].
The impact of an increase in April is already being felt by bill-payers, with a third of households saying their bills are higher than they were this time last year[4]. This may also be partly caused by lockdowns and people spending more time working from home, as a quarter of households (27%) say their energy use has gone up in the past year[7].
One in seven people (14%) often worry about paying their bills[8], and three fifths (61%) of younger consumers aged 18-34 are stressed at the thought of the price cap rising[3].
At the same time, three in ten households (30%) are planning to reduce their energy use this winter so they can afford their energy bills[9].
Three in ten people (30%) say they would reduce the temperature of the thermostat to save money, and one in seven people (13%) would turn off the heating altogether and 13% said they would cut down spending on essential food[9].
Justina Miltienyte, energy policy expert at Uswitch.com, comments: “Many people are already in a risky position financially, and it’s worrying that an increase of £10 per month in energy bills could push a quarter of households into debt.
“Unfortunately those very circumstances are likely to happen this week as Ofgem announces the increase in the default tariff price cap.
“People on SVTs will be directly affected by any increase in the price cap but it is possible to get protection from this market volatility and reduce your bills, by switching to a cheaper fixed deal.”
FOR MORE INFORMATION
Ross Stebbing
Phone: 07827 836 709
Email: ross.stebbing@rvu.co.uk
Twitter: @UswitchPR
Notes to editors
Research conducted online by Opinium, 16 to 19 July 2021, among 2,000 adults, weighted to be nationally representative.
1. Respondents were asked ‘If your household bills increased, how much extra could you afford to pay each month without going into debt?’ 541/2000 = 27% who could not cope with an increase of £11 or more. 27% of 27.6 million UK households = 7.4 million households. 11% said they could not cope with any increase in their bills.
2. Respondents were asked ‘Have you ever struggled to pay your energy bills?’ 17% said they had struggled in the past 12 months.
3. Respondents were asked ‘Experts expect the energy price cap to rise in October. This price cap would affect variable tariffs and those using prepayment meters. How does this make you feel?’ 340/563 people on variable tariffs and prepayment meters = 60.4% who are stressed. 61% of those aged 18-34 said it made them feel stressed.
4. Respondents were asked ‘How has your energy bill changed compared to this time last year?’ 690/2000 = 34.5% said their bills had gone up. Average rise in bills was 4.6%.
5. Respondents were asked ‘What proportion of your household income after tax, is spent on your energy bills?’ Respondents with a household income of £20,000 or under said they spent an average of 10% of their income on energy bills.
6. Respondents were asked ‘What is your annual pre-tax household income?’ and ‘What kind of energy tariff/meter are you on?’ 60/478 people earning less than £20,000 are on prepayment meters = 12.5%. 2% of those earning over £40,000 are on prepayment meters.
7. Respondents were asked ‘How has your energy usage changed compared to this time last year?’ 27% said their energy usage had gone up.
8. Respondents were asked ‘Thinking about your current household bills, how often do you spend worrying about paying them?’ 14% said they worry about their bills daily/often.
9. Respondents were asked ‘Are you planning on reducing your energy use this autumn/winter so you can afford your energy bills?’ 30% said yes.
10. Respondents were asked ‘If your energy bills increased, would you do any of the following to cover the cost? Select all that apply.’ 30% said reduce temperature on the thermostat, 24% said use less hot water, 22% said cut spending on takeaways, 22% said cut spending on clothing, 21% said heat fewer rooms in the house, 20% said cut spending on entertainment, 13% said cut spending on essential food and 13% said turn off heating completely.
About Uswitch
Uswitch is one of the UK’s top comparison websites for home services switching, including energy, broadband and mobiles.
More people go to Uswitch to switch their energy, broadband and mobile than any other site, and we have saved consumers over £2.7 billion off their bills since we launched in September 2000.
Free mobile app Utrack also helps households manage their home energy usage and make potential savings.
Uswitch is part of RVU, a group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.
