Last updated: 15 October 2020
In this guide you’ll get the answers to the following questions:
Can I change energy supplier if I’m in debt?
What should I do if my bills are unexpectedly higher than normal?
How do I pay off my debt through a repayment plan?
How can I pay off my debt with a prepayment meter?
Can I pay off my debt through my benefit payments?
Can my energy supplier disconnect me?
Can I make a complaint about my supplier’s handling of my energy debt?
The important thing to realise is that you’re not alone, so don’t panic. As energy prices rise, millions of people find it increasingly difficult to keep up with their monthly bills, leading to energy debt. However, your energy supplier will be able to help you put together a plan to get you out of debt.
Yes, if you’ve been in debt to your energy supplier for 28 days or less. In these circumstances, you can switch supplier and your outstanding balance will be added onto your final bill. This is a smart option if you choose to switch to a cheaper energy plan, as you’ll start paying less for your energy, making it easier to pay off what you owe to your old supplier.
However, if you’ve been in debt to your supplier for more than 28 days, then you won’t be able to switch provider. Legally, you must pay off what you owe to your supplier before you can switch to a different energy plan with a new provider. At this point, you should get in touch with your energy supplier.
Step one is to eliminate the possibility that your bill is the result of a faulty meter. Perform the following checks:
Is the meter reading correct?
Were your previous meter readings correct?
Is the bill for the correct meter?
Has your meter been read recently?
If you answer “no” to any of these questions, get in touch with your supplier, as it’s possible your unusually high bill may be the result of a faulty meter or inaccurate estimates about your energy usage.
It’s in your supplier’s interest as much as it is yours to get your debt with gas and electric paid off, so start by calling or writing to it to explain your situation and see what help you may be able to get. A debt repayment plan is likely to be the suggested course of action.
An energy debt repayment plan allows you to gradually repay your debt while also paying for the energy you consume in the meantime. In most cases, this will be paid on a weekly, fortnightly, or monthly basis until your energy debt has been paid back. Some of the money pays off the debt, while the rest pays for the energy you’re currently using.
In rare cases, you may find yourself unable to keep up with payments on a repayment plan. This is the point where you should contact your supplier to renegotiate the plan over a longer period to provide a more manageable schedule. Citizen’s Advice has a useful letter template that you can use to request a new repayment rate for your energy debt.
You can ask your current supplier to fit a prepayment meter so that you can pay off your energy debt over a longer period. In some cases, your supplier can receive a court warrant to enter your home and fit a prepayment meter. If you do switch to a prepayment meter for debt, you may be put on a more expensive tariff, so it’s a good idea to talk to your supplier to see if this is the right move for you.
The main benefits of prepayment meters are the fact that they give you much more control over your energy spending. You can’t spend more than you put in the meter (usually through some sort of top-up system), which stops you from running up a significant energy debt.
Installing a prepayment meter is also more likely to encourage you to pursue other energy-saving initiatives, such as keeping the lights switched off or installing energy-saving bulbs, all of which helps to reduce the amount you spend on energy, making it easier to pay off your gas and electric debt.
Once you start to reduce your gas and electric debt through a prepayment meter, you can switch to a new supplier (assuming you owe less than £500 for electricity and £500 for gas). This is called the “Debt Assignment Protocol.” Basically, your new supplier takes on the debt and you’ll continue to repay it.
Of course, if you do run out of credit, you won’t be able to use electricity or gas, which makes it vitally important you stay on top of your prepayment meter debt.
Yes, in some cases you may be able to make small deductions from your benefits that go towards paying off your gas and electric debt. This is known as the Fuel Direct Scheme or third-party deductions. Essentially, a fixed amount will be deducted from your weekly benefits to cover the amount you owe, as well as your current use. You’ll need to be receiving one of the following benefits to take advantage of the Fuel Direct Scheme:
Income-Based Jobseeker’s Allowance
Income-related Employment and Support Allowance
Universal Credit (if you’re unemployed)
There are a couple of other schemes that can contribute to your energy bills. Although they aren’t specifically designed for people who are in debt with gas and electric, the Warm Home Discount, Winter Fuel Payment, and Cold Weather Payment schemes can be a useful way for low-income or elderly people to receive some assistance with their bills.
Even if you’re in debt with gas and electric to a supplier that shuts down before you’ve finished repaying what you owe, you still need to keep making payments unless you’re told otherwise. In some cases, your new supplier will arrange to take on your debt, so you’ll need to continue repaying the debt to it. Ultimately, your supplier should communicate to you exactly what you need to do regarding your debt, so you shouldn’t be left in the dark.
Yes, as a last resort, electric and gas disconnection law permits your energy supplier to apply for a warrant to disconnect your energy supply. Before disconnecting you, you’ll be sent a disconnection notice at least 28 days after your bill. In addition, suppliers are legally required to give you seven days’ written notice. Once you’ve received a disconnection notice, there’s usually little you can do as it represents the final straw for your energy supplier.
There are some exemptions: pensioners living alone or with children under five years old can’t be disconnected during the winter months (1st October-31st March), while the big six suppliers have all signed an agreement to protect people with disabilities, long-term health problems, severe financial problems, or young children living at home, meaning if you fall into this group you won’t be disconnected at any time if you’re with one of British Gas, EDF Energy, npower, E.ON, ScottishPower and SSE.
If you feel that your energy supplier has treated you unfairly, you can raise a complaint through the company’s complaints process. If, after your complaint has been resolved, you’re still not satisfied, you can escalate your case to the energy ombudsman. Remember that you won’t receive a resolution to your complaint for a little while, as your energy supplier will need time to investigate, so if you’re in debt with gas and electric you should keep repaying your supplier in case your complaint isn’t resolved in your favour.