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Energy bills could push people into debt

Energy bills could push people into debt

Category: Debt

Updated: 08/03/2011
First Published: 28/07/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Rising costs of utility bills could force people into a spiral of unmanageable debt, it has been warned.

British Gas today announced that its profits increased by some 98% to £585 million in the first six months of 2010, after a bracing winter.

The energy giant said that gas usage was up by 8% on 2009, and that it has added 400,000 residential customers.

Against this backdrop, the Consumer Credit Counselling Service (CCCS) has said that spending by its clients on energy bills has risen at a far faster rate than the Retail Prices Index.

In fact, the average six monthly gas and electricity bill for its clients went up by 80% from January 2004 to January 2010.

There is now a worry that further hikes in costs could not only leave people unable to pay their bills, but may result in them having their vital gas and electricity supplies cut off.

"It is increasingly not excessive credit that is pushing people into debt but the high cost of everyday living," commented Malcolm Hurlston, chairman of the CCCS.

"With wage freezes and redundancy, many people have cut back on their spending so that they can repay their debts but energy use in the home, which is a necessity, can only be limited so far.

"We will see more and more people pushed into unmanageable debt if fuel costs continue to rise at such a fast rate."

The debt charity warned last week that just 15% of people who find themselves struggling with debts do so because of overspending, with problems far more likely to arise because of redundancy, a pay freeze or reduced working hours.

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