Investing

Britons Fall Further Into Energy Debt Even as Bills Come Down

(Ofgem)

(Bloomberg) -- UK households have accumulated energy debts of £3.3 billion ($4.3 billion) even as bills ease, a reminder to the new Labour government that lower power and gas costs haven’t tempered the cost of living for many.

Energy debts at the end of the first quarter were up £1.1 billion from a year earlier, according to data from regulator Ofgem. That’s because increases in mortgages, food and other expenses have meant some households now view energy bills — which are still well above pre-crisis levels — as a lower priority.

The government will soon launch Great British Energy, a public company that won’t supply households but is designed to lower bills by spurring investment in clean energy.

The new administration has promised to slash fuel poverty through GB Energy, yet “change won’t happen overnight,” said Rachel Littlewood, a director at consulting firm BFY Group. The “debt position will continue to worsen” in 2024.

A decline in wholesale energy costs has brought down household bills — with Ofgem’s price cap falling 7% to £1,568 this month — but they remain about 50% above pre-crisis levels.

©2024 Bloomberg L.P.