UK Homes in Energy Bill Debt Surges 36% This Year, EDF Says

image is BloomburgMedia_S1P6ODDWRGG001_01-10-2023_18-13-40_638317152000000000.jpg

A light on at a residential home near an electricity transmission tower in Upminster, UK, on Monday, July 4, 2022. The UK is set to water down one of its key climate change policies as it battles soaring energy prices that have contributed to a cost-of-living crisis for millions of consumers.

The number of customers falling into debt on their energy bills has increased by 36% since the beginning of this year, according to EDF Energy. 

The company plans to roll back standing charges — fixed costs added on top of bills to cover being connected to the grid — for vulnerable customers this winter to help reduce the strain. Daily charges for direct debit customers have increased by 107% for electricity and 8.2% for gas since April 2021, EDF said.

“The current system means those with smaller homes, who use less power, pay proportionately more. That is not right,” said Philippe Commaret, managing director for customers at the utility. “And that’s why we’ve decided to roll back standing charges for at least 260,000 customers to their pre-crisis levels this winter.”  

UK energy bills are set to fall from October though households could still face rising costs in the coming months, following the phase-out of government support. Estimates show that one in three homes will pay higher bills, putting pressure on the government to do more to help offset the cost-of-living pressure. Reducing standing charges or moving them to general taxation is one option suggested by EDF. There have been calls from lawmakers and energy suppliers for a social tariff to be introduced to lower bills for vulnerable customers. 

Ofgem is increasing standing charges for pre-payment meters, usually put into homes of customers that have struggled to keep up with bills. The Net Zero select committee, that holds the government to account, has asked the regulator to review its approach to these charges.

(Adds detail on standing charges in fifth paragraph)

©2023 Bloomberg L.P.

By Rachel Morison


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