Parents borrowing from their kids to pay utilities bills

Given that most households receive their gas or electricity bills once every four months, it's long been the case that many consumers dread hearing the envelope drop through their front door, with many struggling to come up with the cost of a quarter of a year's power in one go.

However, while in the past such bills may have forced consumers to tighten their belts a little bit - for example giving up the pub or meals out for a few days at the end of each quarter - now tens of thousands of people are being obliged to take drastic steps to pay their suppliers.

In spite of the savings to be made from shopping around and switching utilities suppliers, new research has found that growing numbers of UK households are struggling to cope with ongoing rises in the cost of gas and electricity.

According to Engage Mutual Assurance, around one in five parents in the UK have borrowed money from their children's savings accounts at some point in the last 12 months, with the typical 'loan' standing at between £200 and £500.

Notably, of those people admitting to dipping into their kids' accounts for a short-term financial fix, 40 per cent did so to pay their household bills, with two in three feeling that they have no alternative if they are to keep on the good side of their suppliers.

Karl Elliott, marketing director at the firm, explained: "It is evident from this survey that the majority of parents who have borrowed money from their children have only done so because they found themselves in a desperate situation."

Furthermore, the findings of the study also suggest that this trend is set to continue well into 2010 as the UK's biggest energy suppliers neglect to make giving their customers a much-needed helping hand their top New Year's resolution.

On a more positive note, those consumers already worrying how much lighting their Christmas tree or cooking their turkey will have cost them when the first bill of 2010 drops through the door have been given at least a little hope after the energy regulator warned suppliers against putting their rates up further over the coming months.

While utilities firms have long argued that they will have to invest billions of pounds in upgrading Britain's energy infrastructure over the next few years, particularly if the government's ambitious renewables targets are to be met, Ofgem has stated that ordinary consumers should not be asked to foot the bill for such an upgrade.

The watchdog's chief executive Alistair Buchanan stated: "Ofgem's role is to ensure that companies can invest, but do not use investment as a shameful excuse to overcharge consumers."

What's more, he added that Ofgem "will not shy away from proposing radical reform to protect the interests of consumers", indicating that UK households are likely to be protected from a further year of price hikes and children's bank accounts protected from hard-up parents.