International Finance
Energy Magazine

Solving the ‘Energy Bill’ dilemma

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Veterans and their families who are having financial difficulties paying their energy bills now have access to grants from the Royal British Legion

Although annual energy costs will decrease starting in October 2023, prices are still significantly higher than they were a few years ago, which has left many people concerned about how they will pay for gas and electricity bills.

Energy regulator Ofgem has introduced stricter guidelines to protect consumers after some struggling customers were put on more expensive prepayment metres.

What happens if your bill is not paid?

Your supplier may try to force you to install a prepayment metre or move your current smart metre to prepayment mode if you and they can’t agree on a payment schedule.

Suppliers will now be required to contact delinquent customers at least ten times before installing a prepayment metre to offer them a better chance to pay off their arrears. A “site welfare visit” will also be required.

In extremely rare circumstances, you might be threatened with disconnection if you haven’t paid a bill after 28 days, but you’ll typically be given a metre first.

Your provider cannot disconnect you between October 1 and March 31 if you reside alone or live only with the elderly or minors. Your information may be given by suppliers to a debt collection firm, for which you may be charged more. For late payments, many suppliers additionally impose additional costs.

For gas and electricity, direct debit is typically the most affordable method of payment. Future bills are likely to increase if you cancel a direct debit.

Last but not least, failing to pay your payments could harm your credit and make it more difficult for you to borrow money in the future.

Getting the metre switched to prepayment

The supplier can only install a prepayment metre after exhausting all other options. They are also unable to install metres for customers over the age of 85, those living alone, and those who are terminally ill.

People with ongoing medical needs and households where no one can top off the metre because of physical/mental impairment are also exempted.

To lessen the chance that they may run out of supply, those who are remotely or by warrant pushed onto prepaid metres will first receive £30 of credit.

Additionally, suppliers have been instructed to pinpoint the locations where metres were incorrectly placed, take customers back to their prior rates, and provide compensation.

Things to do if you can’t pay bills

To pay for your real monthly use, you can alternatively ask for a flexible monthly direct debit. Smart metres or frequent readings are necessary for this.

However, since two-thirds of gas consumption occurs in the winter, you must consider the effect of lowering your payments in the summer. You should also ask your provider for an “able to pay plan” based on what you can afford if the direct debit is reasonable but you are unable to pay it.

Your arrears will rise more slowly if you pay something each month, even if it’s less than what is owed, so your supplier could be less concerned about your debt. Additionally, you might choose to have your name put on the Priority Services Register (PSR), a list of households that need additional assistance.

Pensioners, expectant mothers, parents of young children, and those with disabilities are all eligible. If necessary, your provider can also add your name to the network operator record. If you require your electricity supply for medical reasons, Ofgem advises doing this.

You must get in touch with both your gas and electricity providers if they are separate. Your arrears still exist even if you are on the PSR. However, it does demonstrate your vulnerability, which your provider needs to keep in mind.

Also, verify that you are claiming all available benefits. On the independent MoneyHelper website as well as by the charities Policy in Practise, Entitledto, and Turn2us, benefits calculators are available.

Through the government’s Fuel Direct programme, you might also be able to pay off your debt with money immediately taken out of your benefits. Many vendors and nonprofit organisations also provide grants to assist with expenses.

A variety of government assistance programmes are available to aid people with their energy costs, including assistance for households receiving means-tested benefits, pensioners, and recipients of specific disability payments.

In October 2022, the government introduced the Energy Price Guarantee, which set a £2,500 annual cap on the average energy price for a dual-fuel household. This persisted until the end of June when an average annual energy bill under regulator Ofgem’s energy price cap dropped to £2,074. Bills will drop to approximately £1,923 between October and December under the new pricing cap.

Respite for senior citizens

During frigid weather, older individuals and those receiving certain benefits may be eligible for £25 Elderly individuals and those receiving certain benefits in England and Wales can apply for grants under the Cold Weather Payment scheme to help with costs when local temperatures drop to zero or below.

Between November 1 and March 31, it applies if the average temperature is, or is predicted to be, 0°C or lower for seven days in a row. For every week, you are given £25 back. If you receive pension credit, other benefits like some beneficiaries of Universal Credit, or assistance with mortgage interest, it’s typically automatic. For additional information, see our complete cold weather payment guide.

Scotland’s households will receive £50 regardless of the weather.

The Low Income Winter Heating Assistance programme has taken the place of the Cold Weather Payment programme in Scotland. Under this, homeowners who qualify will receive a fixed payment of £50 per year to assist with winter heating expenses.

You won’t need to take any action to receive one because payments will be delivered automatically between February and March starting in 2023. Although the eligibility dates for 2024 have not yet been revealed, you must be receiving one of these benefits. Your eligibility for the £50 payment will be confirmed in writing by Social Security Scotland.

What about veterans?

Veterans and their families who are having financial difficulties paying their energy bills now have access to grants from the Royal British Legion. Non-repayable emergency funds are being made available to people who have served in the Royal Navy, British Army, or Royal Air Force, as well as to their relatives, dependants, and caregivers.

You could receive up to £1,200 (£200 per month for up to six months), depending on your specific situation.

You should automatically qualify if you currently get any means-tested state benefits, such as income support, pension credit, or universal credit. You can still apply even if you don’t qualify for any benefits because the organisation encourages everyone who is having financial difficulties to do so.

You won’t typically receive payments in cash. Instead, depending on your circumstances, you’ll receive things like vouchers to top off your prepayment gas or electric metre, along with a virtual credit card that can only be used to pay utility bills. These can be complemented with vouchers for groceries, clothes, or housewares and last but not least, substitute white goods.

More tips

If you have a combi boiler at home, which means you lack a hot water cylinder and the boiler is connected to a (often white) plastic pipe, you might want to think about lowering the heating flow temperature.

Look for a dial or group of buttons with a radiator icon on the front, often hidden behind a flap. The third number on the dial, or the noon position, should be selected. Choose 60C if the device has a digital display.

Additionally, you might wish to stop the hot water from preheating. To ensure that there is always some hot water available, many boilers turn on and off every few hours, day and night.

Turning it off saves money and is unnecessary in the majority of homes.

Although the organisations listed in the article assist with all energy-related issues, aiding with budgeting and debt is their primary focus. Therefore, these may be ideal if you find yourself in energy debt or if your issues go beyond energy.

If you’re in England or Wales, you can fill out an online form and receive an email response from a skilled adviser by calling the helpline number of 0808 223 1133. You must contact your local Citizens Advice Bureau if you reside in Scotland.

It claims to be able to assist with the majority of energy issues and can also connect you to its extra help section, which can offer specialised assistance to people in vulnerable situations to settle issues with energy companies.

StepChange is a nonprofit organisation that offers free debt counselling to people in Wales, Scotland, and England. You can get in touch with it at (800) 138-1111 or online.

It can collaborate with you to create a unique repayment strategy, set up and oversee a debt management programme for you, or even assist with strategies to eliminate debt if you are unable to make payments.

The Department for Work and Pensions, which sponsors MoneyHelper, offers free, unbiased, and private financial advice to everyone in the UK. It can be reached by phone at 0800 138 7777, online chat, email, or WhatsApp.

It can assist you in locating a free and confidential debt counsellor in your region, as well as provide you with personalised advice and direction on financial matters, including energy bills and how to prioritise debt.

American Debt Line is a nonprofit organisation that provides free, impartial advice on debt to people in England, Scotland, and Wales. You can communicate with it through a webcam or by dialling 0808 808 4000.

It can assist you in creating a debt management strategy and provides a free budgeting tool.

While energy costs are expected to decrease, they are still a concern for many people, which is fine. It’s important to remember that there are options available to help with energy bills, such as flexible direct debit payments, asking for an “able to pay plan,” and seeking government assistance programmes.

It’s also important to keep in mind the consequences of not paying energy bills, including the possibility of a prepayment metre being installed or harm to your credit. If you are struggling with energy debt or issues beyond energy, some organisations can offer assistance with budgeting and debt. Remember, it’s always better to seek help early on rather than wait until the situation becomes dire.

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