10% of households now in arrears on utility bills, data shows
Following Ofgem's energy price cap hike, 1.6 million households missed their bills for the first time.
As the cost of living crisis worsens, the number of households falling behind on their utility bills has now hit 2.7 million.
According to new figures from credit reference agency Equifax, one in 10 UK households are now in arrears, an increase of 14 per cent between April and June 2022.
On 1 April, Ofgem increased the energy price cap from £1,277 to £1,971.
Over the following three months, the number of households in ‘early delinquency’ – those that missed one or two bills for the first time – rose by 22 per cent, to 1.6 million.
“These figures are a warning sign of what’s to come; the early tremors in what is shaping up to be an earthquake to household finances this winter,” Equifax UK chief data and analytics officer Paul Heywood said.
“By the end of June, one in ten households were already struggling with energy bills, but we all know this is just the tip of the iceberg. Ofgem’s changes to the price cap take two months to flow through into finances, and as winter bites this number is only going to rise.”
Heywood said the “most troubling signal” is the early delinquency data, with early missed payments likely to escalate if households do not receive more support.
“This is not the time for finger pointing, we all know someone who is worried about how they will tackle this winter, and we should all be coming up with ways to help,” Heywood continued.
“From the government, we need swift financial support and protection for lower income households, as we saw with mortgage holidays and other forbearance measures during the pandemic.”