Money Advice Trust calls for establishment of government-funded ‘Help to Repay’ energy bill scheme
Energy Secretary urged to offer further financial support in light of research showing that 5.5 million people in UK were behind on their energy bills in April 2023
The Money Advice Trust (MAT) has called for the establishment of a government-funded 'Help to Repay' scheme.
Introducing a new research report, Under pressure: Tracking the impact of the high cost of living on UK households, the MAT says that a survey of 2,000 UK adults combined with a comparison of data from polling carried out in 2022 found that –
- an estimated 5.5 million people (1 in 10 UK adults) were behind on their energy bills in April this year, an increase of 2.1 million compared to March 2022;
- although support is available from energy providers for people who are struggling, an estimated 3.9 million people (7 per cent) said they have not been able to access help for their bills after contacting their suppliers for support; and
- a further 3.2 million people (6 per cent) reported not being able to get through and contact their supplier for help when they had tried to do so.
Turning to household bills more broadly, the MAT says that since March 2022 the number of UK adults who are behind on one or more household bill has risen by 7 percentage points from an estimated 7.9 million to 11.6 million people, and that –
- a fifth (21 per cent) of people in receipt of means-tested benefits have gone without food in the last three months;
- 50 per cent of people unable to work due to long-term illness or disability said money worries are impacting their health; and
- compared to the general population, the proportion of people turning to food banks due to rising costs almost doubles to 1 in 10 amongst people from a black African or Caribbean background.
As a result, the MAT says that it has joined with StepChange Debt Charity, National Energy Action, Scope and ten other organisations in writing to Secretary of State for Energy Security and Net Zero Grant Shapps to call for the establishment of a government-funded 'Help to Repay' scheme which would offer access to two different forms of support depending on the level of need of the individual –
- debt relief in the form of writing off eligible energy arrears; or
- repayment matching, for example by matching each pound repaid with an equivalent amount of debt relief, or providing debt relief on remaining arrears after a certain period of ongoing payments.
MAT Chief Executive Joanna Elson said today –
'Energy bills might finally be falling but for millions of households, the effects of this cost of living crisis are already baked in. With more people falling behind on energy and other essential bills and millions facing unaffordable demands for repayment, we need urgent action to make sure everyone has access to a safe route out of debt.
The government has already provided substantial support to help with the cost of living but no-one should underestimate the scale of this continued crisis.
The Help To Repay payment-matching scheme we are proposing will help those who otherwise will simply not be able to dig themselves out of the energy arrears that this crisis has created. And for those most in need, the government should introduce an Essentials Guarantee to link the rate of universal credit to cover the cost of essential goods like food and energy.'
For more information, see 5.5 million people behind on energy bills, as charities call for Help To Repay scheme from moneyadvicetrust.org