People struggling to pay their energy bills could be offered a range of relief measures this winter, with Ofgem suggesting that help for the most vulnerable energy consumers should become a permanent feature of how energy companies operate.
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The proposals include offering all energy customers a repayment plan if they're struggling to pay their bill, and emergency credit of between £5 and £20 to the roughly four millions households on prepayment meters if they run out of credit overnight or over a Bank Holiday.
This may seem like a contradictory move, given that Ofgem have just given the green light to energy companies to start pursuing debts again, spiking fears of bailiffs knocking on the doors of the millions of people who've found themselves in financial hardship almost overnight due to the coronavirus pandemic.
Jonathan Brearley, the chief executive of Ofgem, has explained the regulating body's position: 'It is always best for customers to keep up with their energy bills if they can, but at this time when many may face financial hardship, these proposals mean those who are struggling to keep up are assured of some breathing space.'
Previously, Ofgem cautioned energy companies against 'aggressive' debt collection tactics and called for giving 'careful consideration' of customers' circumstances. However, there has been plenty of evidence that these recommendations have fallen on deaf ears, with many energy companies, including some from the big six, continuing to use bailiffs all through the Covid-19 lockdown and not offering customers any alternative payment strategies.
The Ofgem move to make relief measures part of official best practice, rather than mere suggestions, is welcome ahead of what will be a tough winter for the many UK households already in fuel poverty. We are already witnessing a sharp increase in number of people unable to pay their bills. According to a recent study by the Institute of Fiscal Studies, mortgage, rental, and bill payments all went down in April and May, with the poorest households finding themselves in the most difficult situations, with earnings in that category going down by as much as £160 per month – much more than the average energy bill.
That Ofgem are willing to back up those struggling the most is welcome news, although it also makes clear that the economic impact of Covid-19 will be long-lasting for many.
How to get help with your energy bills
If you are struggling to pay your energy bills, consider the following advice from Ofgem:
- Contact your supplier to arrange a new payment plan or payment break; if you claim Universal Credit, you may be able to set up repayments going out of your allowance
- See if you qualify to get on the Priority Services Register (check Ofgem for details)
- Check if you could be eligible for Winter Fuel Payment contribution (check Ofgem for details)