Rising utility costs are increasing financial pressure on consumers

Much of the public discussion about consumer issues this week has focused on how tariffs could make life more costly. But a new report shows that consumers are already feeling an increasing amount of pain from their utility bills.

A new study by Utilities Now, a utility comparison site,  highlights the severe impact of these rising costs, revealing that a significant portion of the population is struggling to keep up with their utility payments.

The research found that one in six Americans has experienced an electricity shutoff due to unpaid bills, with Generation Z being particularly affected. The financial strain is evident, as many have resorted to borrowing money to cover their electricity bills. Gen Z is again the most affected, with 22% having taken on debt for this purpose.

Manual vs. automatic payments

The method of payment also plays a role in missed payments. Those who pay their utilities manually are more prone to forgetting, with 40% admitting to missing a payment at least once in the past year. In contrast, only 7% of those using automatic payments reported missing a payment. On average, Americans have missed paying their electricity bill three times in the past year, with 73% of those who missed a payment doing so more than once.

The financial burden extends beyond just missed payments. One in six Americans has delayed medical care or skipped meals to afford their utility bills. Gen Z is the most likely to skip meals (22%), while 18% of millennials and 15% of Gen Z have postponed medical care for this reason.

The affordability of utility bills is a significant concern, with 32% of Americans saying they are unaffordable. This sentiment is echoed by 21% of millennials and 22% of Gen Z. According to the research, a majority of Americans (60%) believe that utility companies should adjust rates based on income to alleviate this burden.

The January Consumer Price Index shows the cost of electricity had risen nearly 2% year-over-year but the cost of natural gas rose nearly 5%.