Fuel debt rises despite falling energy costs, new data shows.

Energy costs may be decreasing from their record highs, but the issue of fuel debt remains a pressing concern, as highlighted by fuel poverty advocates Energy Action Scotland. Recent data from Ofgem, the government’s energy regulator, reveals a worrying trend of energy debt increasing by 10% per quarter throughout 2023-24, compared to just 3% per quarter from 2018-22. The total gas and electricity debt and arrears in the UK have now soared to nearly £3.3 billion.

According to Ofgem, households in energy debt or arrears are facing an average debt of over £1200 for gas and nearly £1500 for electricity. The data further indicates that 2.5 million households are currently grappling with energy debt in the UK.

While fuel poverty rates have shown a decline in Scotland, dropping from 37% in 2023 to 31% in 2024, the figures are still alarmingly higher than the 2019 rate of 24%. Despite falling energy bills, Energy Action Scotland stresses that many families are still facing significant financial struggles.

Frazer Scott, the Chief Executive of Energy Action Scotland, expressed concern over the lingering impact of recent cost increases on families. He noted that although energy costs are decreasing, they remain roughly 50% higher than in 2021. This financial burden may lead to long-term stress and worry for families, especially those on low fixed incomes who may struggle to clear their accumulated fuel debts.

Scott also highlighted the disproportionate impact on Scotland, with an estimated share of over £350 million of the UK’s total energy debt. He attributed this disparity to the poorer quality of homes and the colder climate in Scotland, necessitating higher energy consumption for comfort.

As households grapple with escalating debt, some are resorting to extreme measures. Ofgem data revealed that in the first quarter of this year, over one million customers self-disconnected their electricity supply due to affordability issues.

Simon Francis, the coordinator of the End Fuel Poverty Coalition, lamented the lack of attention to the energy debt crisis during the General Election campaign. He emphasised the strain on households, with the average family having to find £2,500 in recent years just to maintain their energy usage. Given the wider cost of living crisis, this financial burden has pushed many individuals further into debt.

Francis called for urgent intervention from the UK Government, advocating for a universal, consistent, nationwide energy debt matching programme to alleviate the financial stress on households.