One in ten UK adults have missed a utility bill payment in the last six months according to new research from Moneyhub Payments, highlighting the need for more flexible ways to pay.
Moneyhub’s recent financial wellbeing survey has shown that around a quarter (24%) of UK adults have missed a payment of some kind in the last 6 months. Of these consumers that have missed a payment in the last six months, 10% missed utility bills. More than three quarters (77%) of those surveyed felt anxious when expecting bills to arrive or be paid, with utility bills causing consumers the most concern with 51% citing them as the bill type that causes them the most anxiety.
Escalating utility prices in the UK, combined with the wider cost of living crisis, have become a significant concern for consumers, with households grappling with the daunting challenge of managing their monthly budgets. The size of the issue is exemplified by Ofgem’s figures published in December (2023) that showed the UK consumer energy bill debt had hit a record £3bn.
This surge in utility prices not only strains the average households’ financial resources, but also stirs deep anxiety about future affordability, particularly among lower-income families and those already struggling with economic hardships, leading to heightened financial stress and uncertainty.
Across the types of utility bills, energy bills were unsurprisingly found to be the most stressful for consumers, with 41% saying they made them the most anxious. This was followed by water bills (14%) and broadband payments (10%).
However, there are solutions available for utility companies to support their customers, particularly those who are regularly struggling with payments. When asked what would help them manage their money or reduce instances of missed payments 38% of UK consumers said that choosing the day of the month Direct Debits are taken would make a difference. A warning before payments are expected (28%) and better oversight of their incomings and outgoings (27%) were also key solutions. In addition, 17% said the ability to pay bills weekly rather than monthly would help them manage their money. With the same percentage (17%) of respondents paid on a weekly basis, this would indicate that such a change could be truly transformative for that group.
Open Banking and Open Finance payments could offer the flexibility required by customers. With Open Banking and Open Finance payments technology, the provider can much better support the consumer by preventing situations when they are blindsided by an unexpected price increase or payment and at the same time making it very easy for the customer to pay or transfer funds.
This means that companies that provide essential services like heating, electricity, broadband, and water have another option: they can track how much the customer can afford and offer them the option to split payments in a way that suits their circumstances.
Open Banking payments enable providers to step in and take actions that would go a significant way to mitigating the issues associated with missing payments, payments anxiety and support overall financial wellness.
Mark Munson, MD of Payments at Moneyhub comments: “Missed payments are causing significant concern for UK consumers, with utility bills the number one culprit. With energy bills high, there is a real worry that this problem will only worsen without intervention.
“Fortunately, there are technologies that utility providers can adopt to improve their offerings to customers and better support when that customer is showing signs of distress. Often customers just need a little extra flexibility to help them get back on their feet, and with Open Banking and Open Finance, providers will be able to identify those struggling and be able to offer them individualised solutions.
“Utility businesses can benefit too by offering alternative payment options tailored to the specific needs of their customers.Companies that offer choice and more control over how consumers pay will reap rewards in improved consumer loyalty, reduced churn and increased customer satisfaction.”
To download the full report please click here.
Contacts
Sam Munton
Account Manager, Teamspirit (Moneyhub PR Agency)
Smunton@teamspirit.co.uk
M: 07919228097
Research Methodology
Research conducted by Censuswide among 2001 nationally representative consumers. The research fieldwork took place between 29th September to 3rd October 2023. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct which is based on the ESOMAR principles.
About Moneyhub
Moneyhub is a data, intelligence, and payments company which develops ISO 27001 certified software for Open Banking, Open Finance, and Open Data applications. Its FCA-regulated Open Data platform enables companies to quickly and easily transform data into personalised digital experiences and initiate payments. Its APIs and fully customisable platform provide data aggregation, insights, notification nudges, and payment systems. As a result, clients have the consent-driven data and analytics they need to create super-personalised offers, products, and services. Hundreds of organisations, spanning finance to media and retail, rely on Moneyhub’s award-winning technology.