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More families could fall into debt with energy companies

27/01/2010

The energy industry regulator, Ofgem, has warned that a combination of `cold weather, high gas and electricity prices and mounting pressure on disposable incomes` could lead to a significant rise in the number of families falling into debt with their energy companies, The Independent reports.

The warning follows a report by the industry regulator, which found that large numbers of people are already falling into debt because they are having difficulty affording their gas and electricity bills.

The report revealed that even before the winter began, `more customers were getting themselves into financial difficulties.` The number of electricity customers entering into a new debt arrangement with their providers in the third quarter of 2009 increased by 13% (compared with figures from the second quarter of the year), while the number of customers entering into new debt arrangements with their gas suppliers increased by 21%.

The average level of debt of customers in difficulties was 20% higher than the figure recorded a year earlier, and there has been a considerable rise in the number of bill payers with debts totalling £600 or more.

An energy expert at uSwitch, Thomas Lyon, said: "These debt numbers could get worse as we are in the middle of a bitter winter which could add an extra £60 on to our next quarterly bills because of the extra heating and energy we have all had to use - this will hit those who pay by cash or cheque particularly hard."

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Government warns about rising credit card debt 05/03/2010 - The latest figures from the Bank of England (BoE) have Debt - the 12-month view 04/03/2010 - In January, UK citizens - between them - borrowed £500 Amount of `bad debt` written off reaches 16-year high 03/03/2010 - The latest figures from the Bank of England (BoE) suggest Deeper into debt: middle-class poverty 02/03/2010 - The recession has also affected a lot of people with