Scotland experiences rising energy debt levels

Energy debt levels in Scotland are rising according to charities working in the country.

Responding to news that Citizens Advice clients in Scotland have an average of £2,300 of energy arrears – a figure that rises to £3,000 in rural areas – some of the charities that are funded by British Gas Energy Trust have told us about the trends they’re currently seeing.

Vadims Dzevaltovskis, Project Lead at Aberdeen Citizens Advice Bureau, said the charity was seeing more people year-on-year and are delving deeper into the reasons behind the trend.

He said:

“Most of the clients we see are in emergency credit. A lot are on prepayment meters and even though they may have run out, they’re still racking up costs through standing charges.

“Some people are even having their emergency credit extended – I know one person who has had theirs upped to £50.

“I’d say we’re seeing more people than this time last year, and we’re trying to understand why that’s happening. We have found that people are not budgeting that well. We understand that things happen in people’s life that can’t be foreseen, but we’re doing a deep dive into their finances to see if people can budget better.

“We’re also seeing a lot of people using fuel vouchers still – and often time after time. So it’s important to find out if they’re taking on the advice that’s been given to them.”

The issues are often heightened in rural areas, where many people do not receive gas to their homes, with housing often being of a poorer quality and less energy efficient.

Ewan Mansley, Energy Support Adviser at THAW Orkney, said the charity was seeing high levels of energy debt – but sometimes as a result of inaccurate readings.

He said:

“Energy debt is becoming increasingly prevalent and potentially higher levels of debt than we have seen previously. In some cases, these may be genuine amounts owed but other times they may be issued in error due to mistakes made by energy suppliers and their systems failing to ‘sense check’ bills. For example, a client was recently told they were over £12,000 in debt but this had been caused by an incorrect meter reading and they were actually £500 in credit. For cases where there are genuine debts, these are up to £7,000.

 “In previous years, before 2023, there was a stark difference in the number of enquiries received in winter (more) and summer (less). While we still see our highest levels of enquiries and referrals in the winter months, there is a much smaller drop off in summer. We are continuing to issue emergency electricity vouchers over summer, even though households will be consuming less energy. However, if households are severely restricting their winter consumption, there might not be too big a difference between winter and summer usage. We had bad weather in early summer, which might have led households to keeping their heating on for more months than they usually would.”

THAW Orkney are also seeing the demographics of the people they support change, with a third of the people they support being ‘working poor’ and a rising number of people approaching retirement with health concerns. A startling one in six of their clients would need to spend all of their income on energy costs to heat their home to an adequate temperature through winter.

Many charities are also preparing for the winter months with supportive packs to provide clients with warming items like hats, gloves, blankets and heaters as well as giving our food and fuel vouchers to those in need.

Following the decision by the UK Government to scale back eligibility for the Winter Fuel Payment, the Scottish Government has followed suit. It has also delayed the launch of its new Pension Age Winter Heating Payment until next year, which will eventually replace the Winter Fuel Payment.

Extra support could come in the form of:

• Child Winter Heating Payments – a £251.50 payment paid to parents and carers of disabled children and young people under 19 who receive a qualifying benefit.
• Warm Home Discounts – a £150 payment towards energy costs for people on certain benefits. This year’s scheme will open in October 2024.
• Winter Heating Payments – a £58.75 payment automatically given to people receiving certain benefits. This will be paid from December 2024.

Detailed information about available support in Scotland is available on the Scottish Government’s Cost of Living website.

To see what grants are available from the Trust, please click here.