Utility bills, such as gas, electricity, and water, are essential items for comfortable living and classed as priority debts.
If you miss or fail to make payments to your providers you will fall into arrears and they may start adding late or non-payment charges to your account, further increasing the total amount that you owe.
In the worst case possible, they eventually could cut off your supply also.
Because utility bills are priority debts, it means that you should always pay payments to these before any unsecured debts such as credit cards, payday loans or overdrafts.
Utilities refer to essential services that maintain household functionality and comfort. The primary utility bills include:
In addition to these, utilities can also cover heating, telephone services, and internet connections. Most people pay these bills monthly, either at a fixed rate or based on actual usage.
In Scotland, water charges are included in the council tax bill. However, in England, Wales, and Northern Ireland, water is billed separately.
There are several reasons why people might fall behind on their utility bills. Here are a few common causes:
Rising Utility Prices Utility companies frequently increase their rates, sometimes without sufficient notice. This can lead to unexpectedly high bills that are difficult to pay, especially for those on fixed incomes or low wages.
Supplier Errors Utility bills are often estimated based on predicted usage. If actual usage exceeds these estimates, it can result in debt as the difference is billed later.
Seasonal Variations The unpredictable British weather can lead to increased utility usage during colder months, resulting in higher bills than anticipated.
Various government schemes are available to help people who are struggling to pay their utility bills. These are generally aimed at individuals with low incomes or those receiving certain benefits.
You might qualify for assistance if you receive:
More details about eligibility can be found on the gov.uk website.
Cold Weather Payment This scheme helps low-income individuals with their heating bills during the winter. The government provides £25 for each 7-day period of extremely cold weather between November and March. Eligibility is based on receiving certain benefits.
Warm Home Discount A one-off payment of £140 is available to low-income households to help with energy costs. This scheme, like the Cold Weather Payment, targets those most in need during the colder months.
Set Up a Direct Debit Setting up a Direct Debit ensures your bills are paid on time and can often lead to discounts from your utility providers. It helps avoid missed payments and the potential for falling into debt.
Find the Best Rates Regularly check that you are on the best tariff for your needs. Use comparison websites to see if switching suppliers could save you money. Ensure you settle any outstanding bills with your previous supplier before making the switch.
Improve Energy Efficiency Consider using a prepayment meter to better manage your energy usage. This system allows you to pay in advance and helps prevent overspending. Additionally, regular meter readings can ensure you are billed accurately.
If you are struggling with utility debt, contact your supplier to discuss your situation. Most companies are willing to arrange a payment plan to help you manage your arrears without compromising other essential expenses.
Failure to pay your utility bills can lead to your supplier taking action to recover the debt, similar to other creditors. If you find yourself unable to repay your utility debt, seeking professional debt advice is crucial.
Tell us about your current debts and one of one of our experienced advisors will talk you through all the options available.
Dependant on your circumstances and financial situation, we’ll look at the solutions so you can choose an option that suits you.
Once you have chosen a solution, we will take the necessary steps to arrange this for you.
Lucy Novo Deakin is a licensed insolvency practitioner in the UK by the Insolvency Practitioners Association (IPA).
My Debt Plan Ltd provides insolvency solutions to individuals, specialising in IVA’s. All advice given is provided in reasonable contemplation of an insolvency appointment. Where you are not suitable for an IVA, we may refer you to one of our trusted partners who specialise on alternative solutions, and as such we will receive payment for the introduction if you enter into a debt solution with one of our partner companies.
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To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.
*Our advice on your options is always free. We will always notify you if a solution you choose has any cost.
**Of 2,381 IVA cases approved between January-December 2023, the average expected write off assuming successful completion is 74%.
A debt write off amount between 25% and 75% is realistic, however, the debt write off amount will differ for each customer upon their individual financial circumstances and is subject to approval of their creditors. Any remaining qualifying unsecured debt in your IVA will be written off, however some unsecured debts will be excluded, such as court fines, child maintenance and student loans, therefore you will need to continue paying these both during and after the IVA.
