TDX Group

11.5 Million households are concerned they will struggle to meet payments on their utility bills

Press Release 28 May 2009 

• Water companies look set to suffer the most

Almost half (46%) of people, equivalent to 11.5 million households are concerned that they will struggle to meet payments for one of more of their utility bills over the year ahead and 10% say they will ‘struggle a lot’, according to research commissioned by TDX Group, the leading provider of debt liquidation solutions for creditors.

Furthermore, water companies look set to suffer the most with 5% (representing some 1.5 million households) already expecting to default on their water bills in 2009. As a result, TDX Group estimates that water companies will accumulate at least a further £350 million of bad debt by the end of 2009.

John Telford, Director of Utilities & Telecoms at TDX Group said: “Since water companies aren’t permitted to disconnect their supply for non-payment, their bills tend to fall to the back of the queue.  Indeed, water companies’ bad debt grew 11% in the year 2007-08 - nearly twice the rate of household bill increases over the same period.”

“As economic conditions worsen, the situation for water companies is going to get a lot worse as competition amongst creditors to recover outstanding debts will intensify.  However, we are seeing some water companies reviewing their debt management practices to enable them to compete better.”

According to TDX Group’s study, 25 – 34 year olds are most at risk of defaulting on their water bill this year with 13% fearing they will miss at least one payment.  On a regional basis, people living in the North West are most likely to default (10%), closely followed by those in the South West (9%). However, just 1% of customers in Wales expected to default.

John Telford added: “Unlike other creditors, water companies can’t play the tough card so they have to think smart instead. Today, bad debt, debt recoveries and write-off costs already increase the typical household bill by 3.5% (or £11) – so supporting our water companies will benefit all of us in the long-run.”

According to TDX Group, water companies that optimise their debt management practices could expect to see a 15% uplift in cash collected.