British household energy debt has tripled in a decade as cost-of-living pressures push families into arrears on priority bills, according to a report. The number of customers falling behind on their electricity bills with no repayment plan in place has more than tripled from 300,000 in 2012 to more than one million at the end of 2024, with the number of customers falling behind on their gas bill also tripling from 300,000 to 900,000 over this period, according to Resolution Foundation research.
The Money On My Mind report suggests that positive trends among low to middle-income households included increased saving and falling credit card debts. But new financial worries for families included rising energy debt and council tax arrears “that need to be addressed”, it said.
The report said the poorer half of the 13 million working-age families in Britain still struggled to save, with more than two-in-five having less than £1,000 in available savings. But the average amount owed by all these families had fallen from £2,617 in 2006-08 to £2,256 in 2020-22 – a real-terms fall of 14%.
Meanwhile, problem debts – such as falling behind on “priority” household bills such as energy and council tax – had increased dramatically. Since the eve of the pandemic, council tax arrears in England had risen by almost half, from £4.6 billion in 2019/20 to £6.7 billion in 2024/25.
Close to a million electricity and a million gas customers were now behind on their bills, and the average size of their debts had surged between 2012 and 2024 from £500 to £1,600, while the average debt for gas rose from £500 to nearly £1,400. These debts remained most concentrated in the poorest fifth of income distribution, where almost one-in-five families (18%) were behind on at least one priority bill, the report said.
The rise in arrears was principally driven by the increase in the bills themselves, with families paying 50% more for each unit of gas they used than before the energy crisis. Meanwhile, the combination of dwindling council tax support and rising bills had increased its burden on the poorest households.
The report calls for improved council tax support and a social tariff on energy bills. Felicia Odamtten, economist at the Resolution Foundation, said: “Families’ financial resilience has been tested in recent decades by a series of financial shocks along with stagnating incomes.
“While families have impressively still managed to reduce their credit card debt and save a bit more, new financial worries have emerged with arrears on priority bills skyrocketing. Tackling these financial problems will require additional help with priority bills, such as improved council tax support, and a social tariff on energy bills. But all too often, lack of financial resilience is simply a consequence of lack of income and addressing this will mean fixing Britain’s dire record on productivity and real wage growth.”
Simon Trevethick, head of communications at debt charity StepChange, said: “This research speaks to what our advisers see on a daily basis – that the sheer weight of everyday costs is pushing households to the brink.
“With over two-in-five StepChange clients in energy arrears, averaging over £2,300, this is one of the most pressing issues they face. For council tax, we see increased levels of harm as the risk of debt escalation and outdated threat of imprisonment loom large over those in difficulty – with average debts topping £2,000.
“There are practical steps consumers can take – fixing your energy tariff ahead of the price cap changes coming into effect, reducing energy usage on a daily basis if it’s safe for you to do so, and reaching out to your energy provider, local authority or a free debt advice provider if you fall into difficulty or arrears.
“But these are sticking plaster measures for a much deeper wound that demands action from central Government. We need to see a debt relief scheme to address historic energy arrears, a fundamental overhaul of council tax regulations – including the end to imprisonment rules – and immediate action from government to build household financial resilience.”
