There are “significant” lockdown bill arrears in the energy and water sectors, with consumers owing their suppliers almost £300 million, according to new research.
Citizens Advice has released new projections about the level of debt based off its previous polling data which found 3 million adults had fallen behind on at least one of their water bills during the coronavirus pandemic, whilst 2.8 million had missed an energy payment.
Due to a lack of public data on the specific amounts owed in each sector, the charity made a conservative estimate by assuming each household in arrears had been unable to pay half of their bill for 3 months.
It calculated that £209 million is owed to energy suppliers, while £76 million is owed to water retailers. For comparison, the consumer advocate estimated that UK households accrued just over £1 billion of energy debt in 2016.
When also including other bills such as rent and council tax, Citizens Advice calculated that households now owe more than £1.6 billion in total.
| Household bill type | Number of households behind on household bills | Estimated total value of arrears for household bills |
| Rent (including social rent) | 628,000 | £909,000,000 |
| Council Tax | 1,459,000 | £284,000,000 |
| Energy | 1,489,000 | £209,000,000 |
| Broadband + telephone | 1,818,000 | £109,000,000 |
| Water | 1,573,000 | £76,000,000 |
| Mobile Phone | 1,382,000 | £26,000,000 |
| Credit card | 1,466,000 | £11,000,000 |
| Total debt | £1,624,000,000 |
Citizens Advice cautioned that if the debts are left unaddressed they will have negative impacts beyond the individuals directly affected.
Specifically, it warned that many creditors, such as landlords, local authorities, and essential service providers, are likely to face high levels of bad debt. It said this poses a risk to such providers and will “at a minimum” result in higher debt costs that will eventually be borne by their other customers.
Douglas Carr, a policy and advocacy intern at Citizens Advice, called on the government to introduce a national programme of loans and grants to help people who have fallen behind on their rent due to the pandemic.
Carr also said the government should provide further hardship funding to local councils so they can support people who have fallen behind on tax bills.
He added: “In other sectors, companies need to continue to support their customers through the pandemic, and regulators need to make sure the right rules are in place to help people with their debts. Government should monitor consumer outcomes and take further action to fill gaps in support, for example, through social tariffs.”
In the energy sector suppliers agreed a series of emergency measures with the government early in the pandemic to ensure the most vulnerable customers are kept on supply.
Earlier this month Ofgem introduced new licence conditions which offer further support to prepayment customers.