Energy Debt - I am struggling to pay
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If you are struggling to repay the debt you can get assistance. It is really important not to ignore the debt or requests for repayment as the situation can escalate. Instead, contact the company and explain your personal situation and any personal circumstances that they should consider.
As well as from the company, you can get assistance from debt charities such as Step Change. They can help you look at repayment plans, grants and other assistance.
There are more details in the detailed rights section.You should know
- If you are struggling to pay the bill your energy company should work with you to find a plan to help you repay your debt.
- If you have an outstanding balance your energy company can recover outstanding old debts.
- Energy debts are priority debts. This is because your energy supplier is able to cut off your gas or electricity if you don't pay. You should prioritise paying priority debts above non-priority debts.
- Charities such as StepChange can assist with helping you set up budgets and repayment plans.
- If you owe money you can choose to pay in full, make arrangements to spread the cost or ask for a pre-payment meter to be fitted.
- If you have a debt of more than £500 on a prepayment meter or your normal meter debt is older than 28 days you cannot move energy supplier.
If you have received a communication from your energy supplier or their debt collection agency for an outstanding bill then it is important that you take action. There are some circumstances in which your debt can be written off (see the detailed rights section).
If you recognise the outstanding debt, and can afford to pay it, then you should repay the debt or set up a repayment plan (with the company or the debt collection agency.) If you do not recognise the debt then contact your energy company and explain in full why you believe the debt to be inaccurate. If the debt is genuine you will be expected to pay.
If you have received a debt collection or demand letter for outstanding monies owed then it is important not to ignore the communication but to take action, as ignoring it can make the situation a lot worse. It is best if you contact the energy supplier and set up a repayment plan if you cannot afford to pay off the entire debt at once. The energy supplier should work with you to come up with a plan that you can afford.
If you have an outstanding debt then the energy company has the right to collect the debt. If you disagree with the outstanding amount then you have the right to dispute the debt. If the debt is accurate you will still be expected to repay the debt. Under the Limitation Act 1980, a creditor has six years to chase unsecured unpaid debts if the occupant resides in England and Wales and five years if they reside in Scotland. This 'limitation period' starts from the time of your last payment or acknowledgement of the debt, not the total length of time you've been making payments. If the energy company is chasing you outside of the above time frames, then please proceed in raising your case using Resolver.
Debts more than 12-months old
If you have an old or outstanding bill then you are obliged to pay this. The only circumstances in which a bill can be written off is if the old debt is more than 12-months old and the supplier was at fault in the way the bill was calculated. For this to apply you must have asked for a copy of your bill and not received it, and co-operated with the energy company in allowing access to your property to read the meter. You must also be seen to actively make, or attempt to make, payments.
Debt Collection Agency
If you have been in arrears for a while, or received a default notice, then the energy company may pass your debt over to a debt collector. This firm is not a bailiff but a specialist at recovering monies owed. Your debt can either be sold onto the agency. They are simply working for the energy company to assist in the collection process. Debt collectors do not have special powers but are simply specialists at recovering debts. Please do not ignore the letters but ensure you take action by either contacting the company to whom you owe the money or getting financial advice from charities such as Step Change. Additional interest can be added to the amount that you owe, but only as set out in your original contract with the energy company.
If your bill is too high
If your bill is too high then you can check the following to ensure it is accurate:
- Is the meter correct, you can ask to have your meter tested to ensure it is accurate.
- Have you given correct previous readings, if they were too low then you could find a higher than expected bill.
- When was the last time you gave a meeting reading? Give them frequently, as the energy company only has to check your meter every 2 years.
- Are you on the best tariff?
- Have you had any new appliances fitted, or are you heating the house more than usual, is there anything that would change your bills?
If you are on benefits
There is a scheme called the Fuel Direct Scheme where you can have the money taken off of your benefits, combining a deduction for what you owe and enough to cover your current usage. The following benefits are included:
- 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 need assistance then you should contact your local Jobcentre and explain you want to set up a Fuel Direct. The Jobcentre will then contact your energy supplier and help set everything up.
Additional financial assistance
There are a number of grants and schemes that are available, operated by energy companies. If you are struggling to pay explain your situation to the energy company and see if they can assist. Citizens Advice have details of a number of schemes that you can access -
https://www.citizensadvice.org.uk/consumer/energy/energy-supply/get- help-paying- your-bills/grants- and-benefits- to-help- you-pay- your-energy- bills/
If you have a debt and are struggling to pay, the energy company can install a pre-payment meter. You can then pay back the money owed and pay current energy consumption by pre-payment. In extreme circumstances the energy company can get a warrant from the Courts to enter your home and fit the prepayment meter.
From January 2018, the rules concerning pre-payment meters will change. Ofgem intends to set a maximum charge of £150 for the installation of pre-payment meters when energy users are forced to have a pre-payment meter installed. People in "severe" financial difficulty, or those who would find the experience "severely traumatic", will not have to pay anything.
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