StepChange Debt Charity responds to rise in the energy price cap

^{23 August 2024}

StepChange is today urging the new Government introduce urgent targeted support for struggling households after Ofgem announced the price cap will increase by 10% from £1,568 to £1,717 this winter. The charity says energy costs remain a significant challenge for its clients, as the average amount of energy debt per StepChange client has risen by 29% year on year – from £1,679 in the first half of 2023 to £2,260 in the first half of 2024.

After more than two years of inflated energy costs, StepChange is concerned that many households are still struggling to afford their bills and repay energy debt, despite prices falling in recent months. The charity says this situation may only worsen as the price cap rises and the colder weather sets in.

Richard Lane, Chief Client Officer at StepChange, said:

“While some households may not have felt the squeeze quite as much in recent months due to the warmer summer weather and a slight fall in the cost of energy, for many – particularly those on the lowest incomes – affording energy bills each month remains uncertain.

“For our clients struggling with energy arrears, levels of debt have risen over the past year regardless of the price cap being lower than it was in 2022/2023. With other essential costs such as housing putting long-standing pressure on people’s budgets, it’s a worry that a rise in the price cap may tip struggling households into deeper debt.

“To overcome this cycle of financial hardship and allow households some protection from the fluctuation in the cost of energy, the new Government must urgently introduce targeted support for those struggling, while addressing the £3bn worth of energy debt that has built up. Too many households are facing fragile budgets, in which even slight rises in the cost of utilities will push them into the red.”