70% of Brits use credit to pay utility bills

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Utility bills have got so terrifyingly out of hand that seven in ten people say they will soon need to use a credit card to pay their bills. Meanwhile, four in ten struggle with their energy bills every month, and one in four say the knock-on effect is that they may not be able to pay the mortgage.

So what's going on?

Inflation

The rising cost of living is killing us. Inflation has hit 5.2%, the highest for three years, and as wages struggle to grow by more that 2%, we're all feeling the pinch.

The rising cost of energy bills has been one of the most damaging blows to our finances for over a year. The latest round of rises alone have added over 17% to gas bills and over 10% to electricity bills, taking the average bill to almost £1,300

Debt problems

As a result, researchers at Moneysupermarket.com found that 71% of people say they will need to use their credit card if they are to continue to afford these rising bills.

This may help keep household finances from imploding in the short term, but clearly is not a long-term solution, as it will simply store up the debts for another month, when the credit card bill will hit the mat at the same time as the utility bill. This means we can expect debt problems to snowball, along with non-payment of utility bills.

Biggest worry

Meanwhile, a separate study by swiftcover.com has found that gas and electricity bills have become the biggest financial concern for one in four families in Britain. This rises to 47% of those aged between 45 and 55.

The effect of these rising bills doesn't just start and stop with not being able to pay these bills, or not being able to afford to heat your home. The knock on effects are creating real distress. Some 23% of those with mortgages are worried about meeting their monthly payments because they have diverted the money to pay the gas bill, and the same number again are concerned as to whether they will have the money to feed their family.

Amanda Edwards, senior marketing manager at swiftcover.com commented: "Staying warm during winter should be a right, but with rising prices, it is increasingly becoming a privilege. When you think of all the snow last year it's clear how difficult it is to live without central heating, however paying the bill is clearly causing people misery. Winter should be an opportunity to enjoy spending time with your family, not worrying about whether they'll be cold at Christmas."

What can you do?

There are some things we can do to help ourselves, by switching to the cheapest provider, choosing an online tariff, opting for direct debit, and taking steps to cut our energy use.

However, if it is too late, and you are already struggling with debts created by rising bills, the key is to get help sooner rather than later. Building up large credit card debts isn't a sustainable way forward. It is well worth getting help from an organisation like the Consumer Credit Counselling Service, which can help you deal with the debts, balance the household budget, and save you from the horrors of not knowing how you are going to feed your family and warm your home this winter.
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