Recent statistics from the Office for National Statistics (ONS) have unveiled a concerning trend, indicating a 39 per cent surge in UK households failing to meet their energy bills compared to the previous year. Despite a recent dip in inflation, failed direct debits for electricity and gas payments rose to 1.17 per cent, up from 0.84 per cent in December 2023. This financial strain has extended to mortgage payments as well, witnessing a 20 per cent year-on-year increase in missed direct debits.
The escalating costs of energy and mortgages over the last two years, combined with the Bank of England’s interest rate hikes, underscore the economic challenges facing households across the country. Despite recent declines in wholesale energy prices, the relief hasn’t translated into reduced household energy tariffs, exacerbating the financial pressure on residents.
As of December 2023, the average monthly energy bill stood at £144.73, showcasing a slight decrease from the previous year but still representing a significant jump from December 2020. Meanwhile, typical monthly mortgage bills continue to climb, reaching £129.44. These figures highlight the persistent financial strain on UK households, with many struggling to keep up with essential payments.
Insights drawn from data provided by payment infrastructure companies Pay.UK and Vocalink indicate a broader issue at play. The economic challenges faced by households are multifaceted, with the combined impact of energy and mortgage costs, alongside interest rate hikes, contributing to the rising number of defaults.
