EMERGENCY credit should be given to households who are struggling to top-up their household electricity and water metres, the energy watchdog has warned.
In March, providers agreed not to cut off supplies for households who couldn’t afford to put money in the metres during the coronavirus outbreak, either as a result of self-isolating or being in financial distress.
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And while many suppliers have typically provided between £5 and £20 extra credit per fuel to struggling households, it hasn’t been consistent across the industry.
Despite the extra measures, Ofgem says it’s still concerned with the number of people continuing to be cut off because they can’t afford to put money in the meter.
The regulator wants to make the voluntary measures a licence requirement, which would force suppliers to offer the appropriate help or face repercussions.
Ofgem is now looking at ways to offer more support to households who are struggling to pay the bills, including through emergency credit.
What to do if you can’t pay your bills
FALLING behind on your energy bills can be extremely stressful.
If you’re struggling to pay what you owe, contact your supplier as soon as possible.
Your provider has to help you come up with a solution, and you should be able to negotiate a deal that works for you both.
One option is to agree a payment plan where you pay off your debts in affordable instalments.
You may be able to pay off your debts directly from your benefits through the Fuel Direct Scheme.
A fixed amount will automatically be taken to cover what you owe plus your usage.
To be eligible, you must be getting one of the following benefits:
- Income-based jobseeker’s allowance
- Income support
- income-related employment and support allowance
- Pension credit
- Universal Credit (but only if you’re not working)
If you cannot come to an agreement with your supplier, they may try to force you to get a prepayment meter installed.
In very rare cases, where you refuse to negotiate, your supplier might threaten you with disconnection.
This is a fixed amount of credit that would be applied to customers’ accounts when their metre runs low and to make sure they aren’t cut off.
Suppliers would also have to provide “friendly hours” credit overnight, at weekends and on public holidays, when top up points may be closed.
Under the measures, vulnerable prepayment customers will have to be given breathing space while they work out an alternative way to pay for the supply.
This includes those who temporarily can’t afford to top up or get to their local shop to do so because of mobility issues or they’re self-isolating due to Covid-19.
It also wants to turn current voluntary arrangements that help customers through winter months into a licence requirement too.
This would mean that suppliers would have to set rates based on customers’ ability to pay them and monitor them, rather than offering it as an option.
Jonathan Brearley, Chief Executive of Ofgem, said: “These permanent protections will reduce the number of prepayment customers temporarily going without energy because they cannot afford to top up.
“It is always best for customers to keep up with their energy bills if they can.
“But at this time when many may face financial hardship, these proposals mean those who are struggling to keep up are assured of some breathing space.”
The plans are currently undergoing a consultation period that ends on August 24 before these measures become compulsory.
A spokesperson from Energy UK, the trade body that represents suppliers, said: “Energy suppliers work hard to help vulnerable customers, including those who use prepayment meters, and many are already offering extensive support in line with these proposals, going beyond existing licence requirements.”
They added that Energy UK is also working on its own set of voluntary measures to improve the levels of support for vulnerable customers.
Energy firms are allowed to start chasing up unpaid bills again from July 1, more than three months after being put on hold.
Instead, energy bills have soared by £32 a month during lockdown – we explain how to save money.
In April, energy firms were urged to write off debts for low-income families during the pandemic.
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