People paying for utilities on credit triples

Ryan Fowler

April 7, 2014

Debt advice and solutions provider Debt Advisory Centre has found that in February this year, 18.9% of UK adults said they paid for their gas, electricity and/or water with credit. This is an increase of more than three-fold since last summer.

When people were asked the same question in August 2013, 5% revealed they had settled a utility bill using credit. Since then, the figure has increased by 14% and is equivalent to 9.52 million UK consumers paying for their gas, electricity or water using some form of credit.

Men were more likely to use credit as a way of settling their bills than women. While 16.9% of women say they used a credit card or loan to pay for their utilities in March, more than one in five (21.1%) men said the same.

People aged between 25 and 34 years old, who are the most likely to have taken their first steps on the property ladder and started a family, are also the most likely to make use of credit to pay their energy bills.

More than a quarter (26.3%) of this age group revealed they did so during February and March this year, compared to just 7% of respondents aged over 55 years old.

Across the country, more than a third (36.1%) of Londoners admitted to settling their energy bills on credit.

This is a significant increase from the 8% who took this action in early August 2013. Meanwhile, people living in the South West were the least likely to rely on credit as a means of paying for their utilities, although more than one in 10 (12.4%) still revealed they had done this.

Spokesman for Debt Advisory Centre Ian Williams said: “What’s worrying about these figures isn’t only how much they’ve gone up in just over half a year. It’s also that so many people are having to rely on forms of credit to pay for essential bills.

“Energy prices are rising, which may explain why three times more people are using credit to pay their bills than last summer.

“However, if the reason households are making use of loans or credit cards to pay for their gas, electricity or water is because they are prioritising paying off other debts, it might be time to seek professional help with getting their finances back on track.”

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