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Household energy debts

Handling energy debts

When you fall behind with your gas and electricity bills, you risk falling into energy debts. Gas and electric bills can mount up, especially during cold spells, so budgeting for them is very important. If your bills are higher than expected, this can have a big effect on your cashflow. As a result, you could fall into debt with your energy suppliers

You might be able to save some money by switching to a cheaper tariff or supplier, especially if you get both gas and electricity from the same supplier.

Reading your own gas and electricity meters on a regular basis is better than relying on estimated readings as it gives you an accurate picture of what you’re using.

I’m struggling to pay my energy bills

As soon as this happens, get in touch with your supplier.

When they’re aware that you’re having difficulties, they may be able to offer different options which could include:

  • accepting regular instalments based on what you can afford
  • using Fuel Direct if you’re on benefits
  • installing a prepayment meter
  • helping you be more energy efficient to cut energy bills

Changing your tariff to help with energy debts: you may be able to switch to a cheaper tariff with your existing supplier – or even use a comparison website like Uswitch to find a better deal. But if you’re tied in, you can ask to pay your bills differently to make them easier to manage, for example, every week or every fortnight.

Extra support: if you have trouble reading your meter, understanding your bill, or you have a medical or mental health condition which makes it harder for you to manage, ask your supplier to put you on their Priority Services Register so that you get extra help. Find out more about this below.

Hardship funds

Some energy companies have schemes to help customers who are struggling to pay their bills. As well as asking your provider about this, it’s worth checking the British Gas Energy Trust even if they aren’t your current supplier. This organisation helps families and individuals struggling with gas and electricity debts by awarding grants to clear those debts.

Fuel Direct

If you receive certain benefits, you can arrange to have a fixed amount deducted directly from your benefits payments to go towards your energy bills. There’s more about this scheme here.

Warm Home Discount

This is a one-off discount of £140 on your electricity bill each year between October and April that you can claim if you’re a low-income household or a pensioner. Find out whether you’re eligible.

Cold Weather Payment

Again, you’ll need to be in receipt of benefits to qualify – this payment is triggered if the temperature in your area drops to zero degrees Celsius or below for seven consecutive days.

What happens if I keep missing payments?

After 28 days from the date of the bill, your energy supplier can start action that might lead to disconnection. If you miss an instalment on an agreed arrangement, your supplier can only start action 28 working days from the date that you missed the payment. So negotiating with your energy supplier is the first and most important thing you should do.

Should I get a prepayment meter to help with energy debts?

A prepayment meter helps you control what you spend. This may be an option if you are having trouble keeping up agreed payments and want to manage your energy bill a little differently. You’ll need to pay in advance for your energy so you won’t be able to spread the cost of your energy over the year as with a payment plan. These meters can also collect debt from the money you put in.

Bear in mind that until the end of 2020, Ofgem has introduced a temporary price cap to limit the cost of energy through prepayment meters, which could reduce a typical gas bill by around £80 each year. However, this doesn’t apply to smart meters.

Will I be cut off?

Energy companies can’t simply disconnect you. They must first offer you ways to pay, and even in the worst-case scenario, your supplier is obliged to give you seven working days’ written notice that they will be disconnecting you because you haven’t paid your bill. You should be able to avoid disconnection by getting in touch with your supplier and negotiating affordable repayments. This might be by Fuel Direct, regular instalments or a prepayment meter.

During the winter months (October to March), your supplier won’t disconnect you if:

  • you are a pensioner living alone; or
  • a pensioner living only with other pensioners or children under 18 years old;

They must also take all reasonable steps not to disconnect you if you are:

  • a pensioner;
  • disabled; or
  • chronically sick;

It’s also worth checking whether your supplier has registered with Energy UK’s Safety Net policy. If you’re vulnerable, this gives you protection from being disconnected throughout the year if for reasons of age, health, disability or severe financial problems, you can’t protect your personal welfare or the personal welfare of other members of the household.

Let your supplier know if this applies to you and that you’re looking for an affordable way of paying for your energy supply. You may also ask to be added to their Priority Services Register, if you have not already done this.

My landlord pays my energy bills, not me

If you’re being threatened with disconnection and you’re not responsible for paying your energy bills, get in touch with your local council. They may be able to help you through their local welfare assistance scheme.

What is the Priority Services Register?

You can also ask your supplier to put you on their Priority Services Register. This is for customers who need extra help and who may have difficulties with their account, and you can apply if you:

  • are a pensioner;
  • are disabled; or
  • have a long-term medical condition.

When you’re on this register, you’ll be able to have your bills sent in large-print, get some help with meter reading, have extra security in place with your supplier such as passwords for phone calls and priority reconnection should your supply be disrupted.

You might also be offered a free annual gas safety check of your appliances if you receive an income-based benefit and you:

  • live alone;
  • live with other adults who are all eligible; or
  • live with others, including a child under five years old.

Get free debt help

If you are self-employed and worried about your finances, or find yourself in the early stages of debt, we may be able to help you find a solution. Running your own business can be lonely, especially when you’re facing money problems – we’re here to support you, by giving you free debt advice and a clear idea of your options. All you need to do is call 0800 316 1833 .

Let’s make life more affordable

You’re just two steps away from taking back control of your finances and freeing up more money for you and your family.

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