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A record proportion of British households were unable to pay their energy bills by direct debit last month because there was not enough money in their bank accounts, according to official government data.
More than 2.7% of direct debit payments for gas and electricity defaulted in April due to insufficient funds, the latest figures published by the Office for National Statistics (ONS) have revealed.
The default rate is the highest published by the ONS since its records began in early 2019 and is three times higher than the 0.9% rate recorded before the global energy crisis caused a surge in costs.
The data also revealed that missed payments on loans, which are often used by struggling families to cover household costs, have also climbed to their highest level since the records began.
Just under 3.9% of direct debit loan payments defaulted last month, according to the ONS, well above the lows of about 2.1% that were recorded during the summer of 2020 when Covid-19 restrictions left many households with extra cash.
The “deeply worrying” energy default figures are expected to lead to higher overall energy debt and arrears, which reached a record £3.8bn at the end of September last year, a £2bn increase from the start of 2022, according to consumer campaigners.
The debts have continued to rise, even as costs under the government’s energy price cap have fallen from record highs in 2022 and 2023 after Russia invaded Ukraine, leading to a sharp surge in prices across Europe.
The UK continues to shoulder some of the highest energy costs in the world, which experts attribute to its strong reliance on gas for both generating electricity and home heating.
Simon Francis, a coordinator at the End Fuel Poverty Coalition, said the figures should “ring alarm bells” in the Treasury because they show that the “energy bill crisis is not over”.
“This is a deeply worrying trend and will only add to the increasing levels of energy debt suppliers are reporting,” Francis said. “It is simply unsustainable for consumer energy debt to continue to grow unchecked.”
He called for the energy industry regulator, Ofgem, to introduce a proposed debt-relief scheme “as soon as possible” to help those who have got behind on their energy bills.
Ofgem closed the two month consultation in February but is yet to publish a response. If the plans are supported it aims to open a statutory consultation within the coming weeks.
