Research from data solutions expert Sagacity shows two-thirds (66%) of the UK, 18.5 million households, are worrying about their ability to pay utilities bills in light of the energy price cap rise and cost of living crisis. A fifth of respondents said they had already cut back on buying food over concerns of rising prices, while 37% of respondents worry they will be forced to choose between heat and food, a figure that rises to 53% for those aged 18-34.
Despite these concerns, just 6% of those who were worried about paying energy bills have considered asking their suppliers for help – fewer than the 9% who plan to hug a pet, or the 18% who have considered sitting in the dark or washing less frequently (22%).
Families and individuals are being faced with some hard choices across the board:
- Half of women reported being concerned about their own or their family’s wellbeing if they need to forego hot water, gas or electric, with over 1 in 5 (22%) saying concerns around utilities bills have forced them to cut down on food.
- Three-quarters of 18-34-year-olds say rising bills are keeping them awake at night, with 38% saying they have avoided giving meter readings for fears of being over-charged, and 8% admitting to giving false meter readings to lower costs.
- Almost half (47%) of households on lower incomes (under £10,000 per annum) worry that rising prices could result in home insecurity and whether they can juggle utilities bills and rent/mortgage. Furthermore, 57% are concerned about theirs or their family’s wellbeing if they need to forego hot water, gas or electric.
- Yet while lower income families are set to be hit the worst, middle-income families are also feeling the pinch: a third of people earning between £30,001 and £40,000 say they may have to choose between heating and food and 44% are very worried they won’t be able to pay their bills.
“One in five of us have seen our bills more than double since last autumn, and with prices set to increase again in October’s price cap review, we are fast approaching crisis point,” said Anita Dougall, CEO and Founding Partner of Sagacity. “The idea that families should be considering extreme measures, such as giving up food or having to compromise on hygiene, should be unthinkable in 2022. And this isn’t just a problem for low-income families – the pinch is being felt across the board. When suppliers are being criticised left, right and centre by the media and Government ministers, it is difficult to convince people in financial difficulty to engage with them, which is why energy suppliers need to get on the front foot and extend help to those that need it.”
Debt Collection Agency visits and bill shock making matters even worse
Compounding this issue, customers are facing a constant stream of billing errors that are adding to anxiety. 2.8 million (10%) UK households have experienced bill shock – receiving no bills for a long period of time, and then being sent a large one out of the blue. And of the 37% of consumers that have moved suppliers in the last twelve months, 40% have experienced issues – 54% of which related to billing.
Despite not being at fault, 31% said that the error made them feel stressed and anxious, while 11% were contacted by a debt collection agency (11%) – 7% even had debt collectors knocking at their door.
Unsurprisingly, such incidents are impacting relationships between customers and suppliers. More than half (60%) don’t trust suppliers, and think they are just trying to get as much money out of customers as possible. Even more (62%) think suppliers calculate Direct Debits as a way to build up large credits in their own bank accounts. And two thirds (66%) say they are very angry and don’t know how suppliers can justify price rises when profits are going up.
However, the research shows data may have the answer, with almost three-quarters (70%) saying suppliers should be using data to help customers much more than they do – though more than half (52%) think suppliers only use customer data to help themselves. Consumers would like an explanation of how bills are calculated (55%), and advice on whether they are on the best tariff (also 55%).
“Suppliers need to build bridges with customers during the current crisis, and data gives them the missing piece of the puzzle,” concluded Anita Dougall. “Suppliers need to proactively use customer data to help people. Firstly, they need to identify those who are struggling – for example, if people have recently missed a bill payment or started claiming benefits, they may have stopped working. Secondly, they need to proactively reach out to these people, ensuring they are aware of assistance they could be eligible for, such as social tariffs or Government support, as well as advice on how to cut down consumption. This will help people during their hour of need, and ensure a stable, loyal customer base over the longer-term.”