Millions to be cut off from gas and electricity this winter as energy bill debt continues to rise
Millions will be cut off from gas and electricity services this winter, as new research from Citizens Advice details the extent to which households are affected by the inability to afford prepayment power top-ups.
The independent, state-funded advice service has said its advisers are helping more people than ever who cannot pay for energy. This winter is expected to be the busiest ever for people who cannot afford meter payments.
The number of people in energy bill debt has topped 5.3 million, according to its research. Being in debt means people are at risk of having a prepayment meter forcibly installed in their home, which they may not be able to afford to top up.
Such installation of meters has recommenced after a temporary pause following outrage when an undercover investigation by The Times revealed major energy companies were installing meters in the homes of vulnerable users.
It comes as the energy price cap has risen this month, bringing prices up, and Citizens Advice data says 800,000 people went more than 24 hours without gas or electricity in 2023 because they could not afford top-ups.
The research also says 1.7 million people were disconnected at least once a month last year.
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Citizens Advice chief executive Dame Clare Moriarty said: “The government has not provided new energy bill support for those in need and has run out of time to develop the long-term approach it promised by April 2024.
“Without immediate action, we risk re-running this same crisis every winter.”
To keep meters topped up and gas and electricity serving homes, nearly three million people are part of households that have skipped meals, cut back on food spending, or sold or pawned items in the last year.
Of particular concern, Citizens Advice says, are the households with children under four, who are twice as likely to be in debt and be forced to disconnect from gas and electricity supplies, compared with those who do not have children.
However, new rules on force-fitting prepayment meters only limit installations for households with children under two.
More broadly, the survey says one in four cannot afford essential bills while one in 10 households had to borrow money in the past six months to pay energy bills.
Half of those in energy bill debt surveyed by Citizens Advice for the research are trying to meet payments by turning off the heat.
Energy debt has hit a record £2.9bn, the service added.
A spokesperson for Ofgem, the independent energy regulator, said: “Ofgem shares the concerns of Citizens Advice about the issue of rising debt and customers self-disconnecting from their energy supply amid the wider cost of living pressures.
“We already have introduced tougher rules to make sure that energy companies do more to spot the signs when a customer may be struggling and step in to offer support, including working out affordable payment plans and providing emergency credit to reduce the risk of self-disconnection.
“We work closely with Citizens Advice and other consumer groups and charities to address the issues people are facing and we will continue to explore more options to help struggling and vulnerable customers.”
A spokesperson for the Department for Energy Security and Net Zero said: “We recognise the cost of living challenges families are facing, which is why we are spending £104bn supporting households with their bills.
“While energy prices are lower than last winter, our Energy Price Guarantee remains in place to protect people until April, and we encourage anyone experiencing difficulties with their energy bills to speak with their supplier.
“We’re also continuing to support the most vulnerable, with three million households expected to benefit from the £150 Warm Home Discount, £900 for those on means-tested benefits, and an extra £150 for disabled people.”
Business
Asian stock markets tumble – with Hong Kong’s Hang Seng index suffering worst fall for 28 years
Asian stock markets have fallen dramatically amid escalating fears of a global trade war – as Donald Trump called his tariffs “medicine” and showed no sign of backing down.
Hong Kong’s Hang Seng index of shares closed down 13.2% – its biggest drop since 1997, while the Shanghai composite index lost 7.3% – the worst fall there since 2020.
Taiwan’s stock market was also hammered, losing nearly 10% on Monday, its biggest one-day drop on record.
Elsewhere, Japan’s Nikkei 225 lost 7.8%, while London’s FTSE 100 was down 4.85% by 9am.
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US stock market futures signalled further losses were ahead when trading begins in America later.
At 4am EST, the S&P 500 futures was down 4.93%, the Dow Jones 4.32% and the Nasdaq 5.33%.
Markets are reacting to ongoing uncertainty over the impact of President Trump’s tariffs on goods imported to the US, which he announced last week.
A screen showing the Hang Seng index in central Hong Kong. Pic: Reuters
Speaking on Air Force One on Sunday, Mr Trump said foreign governments would have to pay “a lot of money” to lift his tariffs.
“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said.
The US president said world leaders were trying to convince him to lower further tariffs, which are due to take effect this week.
“I spoke to a lot of leaders, European, Asian, from all over the world,” Mr Trump told reporters.
“They’re dying to make a deal. And I said, we’re not going to have deficits with your country.
“We’re not going to do that because to me, a deficit is a loss. We’re going to have surpluses or, at worst, going to be breaking even.”
Mr Trump, who spent much of the weekend playing golf in Florida, posted on his Truth Social platform: “WE WILL WIN. HANG TOUGH, it won’t be easy.”
President Trump believes his policy will make the US richer, forcing companies to relocate more manufacturing to America and creating jobs.
However, his announcement has shocked stock markets, triggered retaliatory levies from China and sparked fears of a global trade war.
US customs agents began collecting Mr Trump’s baseline 10% tariff on Saturday.
Higher “reciprocal” tariffs of between 11% and 50% – depending on the country – are due to kick in on Wednesday.
Investors and world leaders are unsure whether the US tariffs are here to stay or a negotiating tactic to win concessions from other countries.
Richard Flax, chief investment officer at wealth manager Moneyfarm, said: “I guess there was some hope over the weekend that maybe we would see this as part of the start of a negotiation.
“But the messages that we’ve so far seen suggest that the President Trump is comfortable with the market reaction and that he’s going to continue on this course.
Goldman Sachs has raised the odds of a US recession to 45%, joining other investment banks that have also revised their forecasts.
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In the UK, Sir Keir Starmer has promised “bold changes” and said he would relax rules around electric vehicles as British carmakers deal with a new 25% US tariff on vehicles.
The prime minister said “global trade is being transformed” by President Trump’s actions.
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KPMG has warned tariffs on UK exports could see GDP growth fall to 0.8% in 2025 and 2026.
The accountancy firm said higher tariffs on specific categories, such as cars, aluminium and steel, would more than offset the exemption on pharmaceutical exports, leaving the effective tariff rate around 12%.
Yael Selfin, chief economist at KPMG UK, said: “Given the economic impact that tariffs would cause, there is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs.
“The UK automotive manufacturing sector is particularly exposed given the complex supply chains of some producers.”
Traders called this morning a complete bloodbath as the UK’s FTSE 100 joined world indexes in turning red as uncertainty over Donald Trump’s tariffs continued to batter stock markets.
Across Asia and Europe, hundreds of billions have been wiped off companies’ values, particularly in banking and manufacturing.
The cause is not just the imposition of those tariffs (the largest the US has inflicted since the 1930s) and the very obvious drag this will have on global trade and growth, but also the uncertainty of ‘what next?’.
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Investors cannot work out if the Trump administration is genuinely wedded to tariffs on this scale, on the proviso that they will help re-shore companies and millions of jobs to the United States.
They don’t know if they are permanent or merely part of a negotiating tactic to address trade imbalances, and for America to use its economic heft to strike better deals.
If Mr Trump is open to deals (the first test comes later in a meeting with the Israeli prime minister), markets will calm, even if the midst of uncertainty hasn’t fully cleared.
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However, if this is a genuine rewiring of global trade and the end of globalisation as we know it, markets and economies will continue to get battered.
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As one Trump supporter, billionaire Bill Ackman – who opposes the tariffs – put it, President Trump has launched a “global economic war against the whole world” that will usher in an “economic nuclear winter.”
It’s time for all of us to buckle up.
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