At StepChange Debt Charity, we help people with a variety of different types of debt, including people who have fallen behind on their household bills. Of everyone we helped in 2017, 2 in 5 were behind on at least one of these. This included 38,135 people with arrears on their electricity bill and 22,186 on their gas.
In our new briefing Behind on the Basics, we looked at which households were most at risk of falling behind on their household bills, and why. However, given the ongoing focus on addressing fuel poverty and the welcome steps taken to improve affordability in the energy sector, we wanted to take a closer look at what was happening when it came to these bills in particular.
Electricity and gas arrears in 2017
When it comes to StepChange clients, we’ve seen a small rise in the proportion who were behind on their electricity (up from 13.3% in 2013 to 14.3% in 2017).
In contrast, the proportion of clients in arrears on their gas bill has decreased slightly (from 12.9% in 2013 to 11.5% in 2017).
We have also seen a gradual increase in the average amount of arrears that our clients have.
Which households were most at risk of falling behind?
When we examined the rate of gas and electricity arrears by different household characteristics - such as age, family composition, income and housing tenure – we found that there were not hugely significant differences between the proportions of clients falling into arrears. This suggests that the focus should continue to be on affordability across the board, to help any customers struggling to keep up.
However, there were some small differences which suggested that young people, single parents and those on low and moderate incomes may be more likely to fall into arrears than other groups. Ensuring that support reaches these groups is therefore key.
We also found that people who had an additional vulnerability on top of their financial difficulties – such as a mental health problem, long-term health condition like cancer or a terminal illness – were more likely to be falling behind. A continued focus on customers in vulnerable circumstances is therefore vital, and that’s why we so warmly welcome the independently chaired Commission for Customers in Vulnerable Circumstances.
Preventing people from falling behind on the basics
The experiences of StepChange clients set out in Behind on the Basics reveal that many are still struggling to get by when it comes to essential household costs. Whilst the incidence of energy arrears may be lower than for some other bills, we are ambitious that there is still more that can be done to help people keep up with payments.
Initiatives such as the Warm Home Discount and extension of the vulnerable customer safeguard tariff are important steps, and we also know that many providers are working hard to help people in financial difficulty.
As ever, it will be important that providers continue to show the appropriate forbearance to customers who fall behind, and take proactive steps to identify and (if possible) reduce the bills of those struggling to pay. The energy industry have demonstrated what a difference they can make to customers in financial hardship, and the challenge now is to keep growing this support so it reaches everyone who needs it. We look forward to continuing to work with the industry and others to achieve this.
Grace Brownfield, Senior Public Policy Advocate, StepChange Debt Charity