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Tackling your debts

4 million of us in the UK are in utilities arrears

Posted 26 March 2013

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If you have debts to your gas, electricity or water provider, you're not on your own. Millions of UK adults have utilities arrears. Find out what you can do about your utility debts.

The Debt Advisory Centre has found that about 4 million adults are currently in arrears on their water, gas or electricity bills.

More than three times that number (13 million adults) perhaps aren't in arrears, but have ignored a bill in the past because they couldn't afford to pay it.

The most common utility people have arrears on is water, with just over 2 million people in water arrears. This is followed by gas and electricity arrears - both with around 1.9 million people each.

People who pay by PayPoint are much more likely to be in arrears than people who pay by other methods. 16% (gas), 18% (electricity) and 27% (water) are currently in arrears, compared with just 3%, 2% and 2% of those paying by direct debit.

How long do we spend in arrears?

It seems that those who get into arrears commonly stay in them for some time.

For example, nearly half (41%) of those in electricity arrears have been in that situation for three months or longer. A third (33%) of those in gas arrears had been in them for three months or more - as had 38% of those in water arrears.

However, quite a lot of people had been in arrears for one month or less - 26% for electricity, 30% for gas and 24% for water.

This suggests that when people get into debt on their utilities, it's either a one-off 'blip' or it's because of a lasting financial problem.


What can you do about utilities arrears?

Sarah Willingham, founder of letssavesomemoney.com, emphasises the importance of treating utility bills as a priority. "It is important to pay your utility bills on time. I suggest that, along with mortgage and credit card debt, it is one of the first bills you should pay at the start of the month and then budget for everything else afterwards. If you can set up a direct debit it means you won't forget, as one missed payment can mean you then struggle to get out of debt."

The most important thing to do if you're in utilities arrears is to carry on paying your bills for your usage. If you don't do this, your water company could take out a County Court Judgment against you - or your gas/electricity company could forcibly install a prepayment meter in your home (and they could charge you for any expenses incurred because of this).


Get in touch...

You need to get in touch with your utility provider as soon as you can and explain your situation. Offer to pay them as much as you can realistically afford towards your arrears on top of your normal bill. Even if they don't accept this amount, pay it anyway. It's better than paying nothing - at least they can see that you're willing to make payments, and it will be reducing what you owe.

If your gas or electricity provider has been contacting you about your arrears for some time, and you're not sure what to do, consider asking them to install a prepayment meter. Although this can be more expensive than paying by Direct Debit, it will stop contact from your providers. This is because they know you will definitely be paying for every bit of energy you use. Your provider can also load your arrears onto your meter - so you pay them as you go too.

Sometimes, you can start to struggle with your utility bills because of other problem debts (like personal loans, credit cards and overdrafts) taking over your budget. If this is the case, it's recommended that you seek expert debt advice immediately.

Getting the right debt help can reduce your problem debt payments to a level you can afford - and leave you enough room in your budget to pay your utility bills and your arrears too.

by Emily Bancroft

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.