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Concerns remain despite energy price cap drop

The UK’s largest debt advice charity has emphasised the need for assistance as households grapple with soaring energy debt

StepChange Debt Charity has emphasised the ongoing need for support as households grapple with escalating energy debt, despite the imminent decrease in the energy price cap.

Despite the cap’s reduction to £1,690 annually from April, the charity underscores the unprecedented £2.9 billion energy debt and calls for targeted write-offs to ease the burden on struggling households.

Richard Lane, Chief Client Officer at StepChange Debt Charity, said: “While it’s positive to hear that energy bills will fall from April, it’s important to bear in mind that the price cap will still be more than 60% higher than before the cost of living crisis.

“We can also see the lasting impact that high energy prices have had on our clients. Over the course of last year, the average amount of energy arrears per StepChange client deepened by 27% from an already staggering £1,608 in January to £2,050 in December 2023.

“Considering two years of sky high rents, rising mortgage rates and food inflation, the picture is still incredibly difficult for millions of households, and the prospect of repaying energy debt while keeping on top of everyday essentials is simply insurmountable for many.

“The government should continue support for low income households, as headline indicators like the price cap and inflation falling don’t reflect the reality for many of those struggling with energy costs.

“The upcoming Spring Budget is a crucial opportunity to help households move out of the red and onto a more sustainable footing. We need to see the Household Support Fund extended, which provides essential crisis support, alongside funding to write off energy arrears for those who cannot afford to pay.

“This should be followed by the introduction of a social tariff for energy as soon as possible to stop unaffordable bills driving debt among struggling households.”

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