What should I do if my energy expenses are too high to pay?
January is the month when annual energy expenses go up as homes try to stay warm during the coldest month of the year.
The energy regulator Ofgem strengthened regulations to safeguard consumers after some individuals who were having financial difficulties were compelled to switch to more costly prepayment meters.
What is happening to energy bills?
In October 2022, the government introduced the Energy Price Guarantee. It took the place of the former Ofgem energy price cap, capping the yearly energy bill of a typical dual-fuel household at £2,500.
This was maintained until June 30, 2023, when the Ofgem cap was reimposed, resulting in an average annual energy bill of £2,074.
Typical annual bills under the previous price cap dropped to about £1,923 from October to December.
Since then, the energy regulator has revised its estimates of the average amount of gas and electricity consumed by homes, bringing the cap’s new value to £1,834.
In January, that will increase by 5% to £1,928.
- Noting that winter energy expenses are more difficult to pay
What happens if you don’t pay your bill?
Your supplier may try to force you to install a prepayment meter or convert an existing smart meter to prepayment mode if you can’t agree on a payment schedule.
You will typically be offered a meter first, but in extremely rare circumstances, you may receive a threat of disconnection if you haven’t paid a bill after 28 days.
Your provider cannot disconnect you from your service between October 1 and March 31 if you are a state pension age customer and either: • live alone; • reside only with pensioners or under-18s;
Your information may be shared by suppliers with debt collection agencies; as a result, you may incur additional fees.
In addition, a lot of providers impose late fees.
The most affordable method of paying for gas and electricity is typically by direct debit. Future bills will probably be higher if you cancel a direct debit.
Your credit score may suffer and getting a loan may become more difficult if you don’t make your payments.
What guidelines apply to prepayment meters?
Following an investigation by The Times that revealed debt agents working for British Gas had unlawfully broken into the homes of vulnerable people in order to install meters, the regulator Ofgem evaluated the usage of prepayment meters.
Following this, energy suppliers were prohibited from requiring a pre-payment meter from a client while Ofgem conducted an investigation. According to the agency, businesses can now continue the practice, but not before obtaining a court warrant and its consent.
Ofgem thinks suppliers ought to be able to collect their outstanding obligations. New regulations, however, require suppliers to contact clients at least ten times prior to placing a meter in order to give them further opportunities to pay off their obligations. In addition, a “site welfare visit” is required. No company, according to Ofgem, has yet passed its new, more stringent assessments.
The following situations are prohibited by the rules from having meters installed: households with no one living there, individuals over 75, those with a terminal illness, people with emphysema, sickle cell disease, or chronic bronchitis; people with children under the age of two; people who require a constant energy supply for medical reasons; and households where no one can top up the meter because of a physical or mental disability
To lower their risk of running out of supply, those compelled to switch to a prepayment meter will receive an initial credit of £30.
Prepayment energy costs will be lowered to match direct debit rates, according to government announcements.
Suppliers have also been told to identify households where meters were wrongfully installed, return the customer to their previous tariff and offer compensation.
If you are unable to pay your expenses, what should you do?
Check your direct debit
Your supplier may lower your bill if its estimate of your annual energy consumption is higher than the actual quantity used. Your monthly payment is determined by your anticipated annual energy use.
A flexible monthly direct debit where you just pay for the actual amount you use is another option available to you. Regular readings or a smart meter are needed for this.
But since the winter months account for two-thirds of gas usage, be sure you know the consequences of cutting back on payments in the warmer months.
Pay what you can
Request a “able to pay plan” from your supplier depending on your financial situation if the direct debit is reasonable but you are unable to fulfill it.
Your arrears will increase more slowly if you make a monthly payment, even if it’s less than what’s owed, and your supplier could be less concerned about your debt.
It could be possible for you to get your name put to the list of families eligible for further support known as the Priority Services Register (PSR).
Pensioners, expectant mothers, parents of small children, and individuals with disabilities are also eligible.
If you depend on your electricity supply for medical reasons, Ofgem also advises you to contact your supplier to submit your name to the Network Operator Register.
You must get in touch with both of your gas and electricity providers if you have separate ones.
Arrears are not waived just because you are on the PSR. However, it does indicate your vulnerability, which your provider ought to consider.
Claim any relevant benefits
Benefits calculators are provided through Policy in Practice, Entitledto, and Turn2us, charities, as well as the independent MoneyHelper website.
Additionally, you might be able to pay back your debt with your benefits by using the government’s Fuel Direct program.
Grants for hardship are also provided by a number of nonprofits and companies.
Verify whether you are receiving additional government assistance.
Pensioners, those receiving certain disability benefits, and households receiving means-tested benefits can all apply for various forms of government assistance to aid with energy expenditures.
For a few qualifying groups, the subsequent payments were due between October 31 and November 19, 2018.
Adjust your boiler
If your home has a combi boiler—a boiler without a hot water cylinder that is connected to a (typically white) plastic pipe—you might want to think about lowering the temperature at which the heating flow occurs.
Look for a dial or set of buttons with an icon of a radiator on the front—sometimes hidden behind a flap. Set the dial to the third position, or 12 o’clock. Choose 60C if it has a digital display.
Additionally, you might want to off the hot water pre-heat. To guarantee that there is always some hot water available, many boilers turn on every few hours, both during the day and at night.
Turning this off saves money and is not necessary in most houses.
