Struggling energy billpayers to get ‘breathing space’ this winter
As part of Ofgem’s plans which come into effect on 15 December, suppliers will be required to offer emergency credit to customers struggling to top up prepayment meters.
This could be because they can’t afford to do so or can’t get to the shop to top up because of mobility issues or because they’re required to isolate after coming into contact with someone who has coronavirus.
Suppliers will also have to offer extra prepayment credit for households in vulnerable circumstances to provide more breathing space while working out alternative arrangements to pay.
Ofgem said the measures will help reduce the number of prepayment customers who go without energy or ‘self-disconnect’ after running out of credit on their meter.
Research carried out in 2019 revealed that of the four million households using prepayment meters, around one in seven had self-disconnected their supply in the past 12 months.
It comes after suppliers voluntarily agreed support for customers on prepayment meters who struggled to top up from March. But now this will form a condition of a supplier’s licence.
Customers in debt
Ofgem has also announced that next month suppliers will need to put customers in debt on ‘realistic and sustainable repayment plans’.
This means suppliers will need to have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on ability to pay.
Philippa Pickford, director of retail at Ofgem, said: “Suppliers have stepped up to the challenge of supporting their customers during the COVID-19 crisis, especially those in vulnerable situations.
“Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter.
“Alongside our wider programme of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.”
Gillian Guy, chief executive of Citizens Advice, which is the consumer watchdog for energy, said: “This raft of new protections from Ofgem should help more people who are struggling to stay afloat.
“Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health – especially during a global pandemic.
“We’ve been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we’re very pleased to see this announcement from the regulator.
“Even with this short-term support from suppliers, many people will still struggle to pay for the basics. Government needs to do more to support those who need it most, including making the temporary uplift to Universal Credit and Working Tax Credit permanent.”