New measures to help vulnerable energy customers revealed
Energy firms will have to offer emergency credit to prepayment customers who are struggling to top up their meters under a package of new measures revealed by regulator Ofgem, designed to help vulnerable customers stay connected.
From 15 December 2020, energy suppliers must issue credit to prepayment customers so that their meters don't run out if they are temporarily unable to afford to top up, have mobility problems, or are self-isolating due to coronavirus restrictions. Separately, suppliers will also have to offer extra prepayment credit to households in vulnerable circumstances to give them "breathing space" to arrange alternative payment plans with their provider.
Ofgem says it hopes these requirements will help to reduce the number of prepayment customers who go without energy or get disconnected from their supplier after running out of credit on their meter.
Struggling customers in debt with credit meters will also benefit from rule changes that will ensure providers offer them repayment plans that are more tailored to their financial circumstances.
While many energy firms have been offering this kind of support to customers since the start of the coronavirus lockdown in March, Ofgem will make this range of measures part of their licence conditions. The new rules follow a consultation which ran from June to August.
See how much you could save on your energy bills by doing a quick full-market comparison via our free Cheap Energy Club and see our Housing & Energy Grants guide for the extra help you may be eligible for.
How will the 'emergency credit' work for prepayment customers?
Emergency credit will be a fixed amount of credit that a supplier will put on to a customer's prepayment meter. This will be done remotely in most cases, without customers needing to go to a shop or post office to top up their key or card.
To receive this credit, affected customers will need to get in touch with their supplier to explain their situation. The credit will then be added to the meter in one of the following ways:
- For most people, they will be walked through the process of adding the credit to their meter over the phone by an engineer, either by changing certain settings on their meter, or by inputting a code given to them by their supplier.
- In situations where this can't be done due to the customer having an older model of prepay meter, if they're able to leave the house they'll need to give a code to a member of staff at a top-up point and the credit will be added to their key or card without needing to make a payment.
- In very rare situations, if a meter can't be topped up remotely and someone is unable to leave their home, a temporary key or card with additional credit already loaded on to it will be delivered to the customer's home.
The amount of emergency credit paid out to customers when their meters run low will be up to the individual suppliers to decide. It's important to note any emergency credit issued will eventually need to be paid back to the energy suppliers.
What is being done for vulnerable customers with credit meters?
As part of the package of measures just announced, from 15 December 2020 Ofgem will also require suppliers to put credit meter customers who are in debt on "realistic and sustainable" repayment plans.
This means that suppliers will have to proactively get in touch with customers in difficult financial circumstances to offer affordable repayment rates, based on the customer's ability to pay.
While many suppliers already offer this type of help to customers on a voluntary basis, these rules will formally require all firms to provide this support.
The rules coming into force from December will only apply to England, Scotland and Wales, as Ofgem does not regulate energy suppliers in Northern Ireland.
What should I do if I am struggling to pay my energy bills?
If you're in a tough financial situation and are having problems paying your bills, you should contact your supplier straightaway. Many firms have been offering help to those who've been struggling throughout the coronavirus pandemic, so get in touch with them as soon as possible.
Also see our Housing & Energy Grants guide to see if you're eligible for free cash to help pay your energy bills and our Debt Help guide for what to do and where to get help if you are struggling financially.
If you're in a vulnerable situation and you need extra support, you can also sign up to the Priority Services Register with your supplier. If you're on the register you'll be eligible for certain free services, including priority support in an emergency (such as alternative heating facilities if your supply is interrupted).
It's also worth doing a comparison via our Cheap Energy Club to check you're on the cheapest tariff, as most can save £100s/yr. If you're a prepayment customer, consider switching to a standard credit meter if you can, as you'll be able to benefit from a wider range of cheaper tariffs. See our Cheap Prepaid Gas & Electricity guide for more, though you'll usually need to have paid off any debts with your supplier before switching from a prepayment meter to a standard credit meter.
What does Ofgem say?
Ofgem director of retail Philippa Pickford 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."