Tips if you can't pay your energy bills

Published:
12 August 2009
Topic:
News,Gas & Electricity,Money,Debt

National Debtline urges troubled households to repay certain debts ahead of other credit agreements. It considers gas and electricity arrears to be a priority debt, so what should you do if you're finding it hard to pay?

The gas and electricity companies can cut off your supply in a few weeks if you don't pay them. No court is involved in this decision. It is important to contact them to make a payment arrangement as soon as you know you are going to have problems. Because of this, you should treat gas and electricity bills as a priority debt.

Checking liability for the bill

If you are not the person named on the bill (for example, if it is in the name of someone who has left your home), you may not be legally responsible for the arrears up to the date they left. You can argue with the fuel company that you are not legally responsible for the bill. This should prevent your fuel being cut off until the dispute has been sorted out. If you are in this position, contact us for advice.

Old bills from different addresses

You can be disconnected for a gas or electricity bill from an old address if you move home and keep the same fuel supplier. As a result, you need to treat old bills from the same supplier as a priority.

How do I make an arrangement?

Bills for gas and electricity are usually sent out every three months. The fuel company will usually want the bill paid before the next bill is due. You can ask to pay your bills every week, every two weeks, or every month. If you have arrears, phone or write to the company and ask for a payment arrangement.

Credit agreements with gas and electricity companies

If you have bought goods such as a cooker, fire or video from the company, and you are paying for them through a credit agreement, ask the company to separate your fuel account from your credit account.

Your fuel supply cannot be cut off because of arrears on the credit account. Use your personal budget to support your offer of payment. This must cover the cost of the fuel you are using and an amount off the arrears.

Make payments

Even if the company does not agree to your offer, start paying what you have offered immediately. Do not offer to pay more than you can afford towards the arrears. All fuel companies should agree, under their code of practice, to accept an offer of repayment in instalments at a rate that you can afford.

If the first person you speak to is unhelpful, ask to speak to someone more senior.

Ask the company for a copy of their code of practice. This explains your rights and how to make a payment arrangement. Most fuel companies will not disconnect you if;

  • you agree to a payment arrangement;
  • you agree to have a pre-payment meter installed;
  • the debt belongs to a person who lived in your house before you;
  • it is between October and March and all the adults in the household are over retirement age.

Some companies will also agree not to disconnect the supply between these times if any of the adults in the household have a severe illness.

Complaints about your supplier

If you have a complaint about how your fuel company is dealing with your arrears, you can contact Consumer Direct for advice or complain to the Energy Ombudsman.

The Energy Ombudsman deals with complaints for Ofgem, the regulatory organisation for gas and electricity. Fuel companies are bound by Ofgem guidelines that say they should take your circumstances into account when making an arrangement to pay.

How do I avoid having my fuel cut off?

You must keep paying for the fuel you are using and an amount off your debt even while you are trying to make an arrangement. To work this out, add up your last four bills to find out the total amount for the year, and then divide this by 52 to work out how much fuel you use each week.

If your bills are high, check that your account is not based on estimates. Ask the fuel company to take an accurate reading.

The company should accept the following arrangements.

Instalments

You could arrange to pay the gas or electricity bill by weekly or monthly instalments, paying off the whole amount before the next bill arrives.

Budget plans

The fuel company works out how much fuel you use over the whole year and you pay a fixed amount every week, every two weeks or every month.

You can spread any unpaid bill over the whole year and include it in the budget plan. If you cannot afford the amount the company is asking you to pay under the budget plan, ask for a special arrangement. The company should let you pay off your debt at a rate you can afford, even if this means spreading the arrears over a longer period of time than a year.

Pre-payment meters

You pay for the gas and electricity you are continuing to use plus an amount you can afford off the arrears through a token, card, or coin meter. You must be asked if you want a prepayment meter before your supply is cut off, if it is safe to install one.

Remember there can be drawbacks to having a pre-payment meter. Your standing charge may be higher and if you cannot afford to buy tokens or cards, you will be without fuel.

Your pre-payment meter should be reset within one month of the price of fuel going up. This means arrears should not build up on your account. If this does not happen, you can complain.

If you have not fallen behind on an arrears repayment arrangement, the fuel company cannot insist that you have a pre-payment meter installed. But you do have the option to ask for a pre-payment meter if you want one.

Direct payments from Income Support, Pension Credit, Employment and Support Allowance, or Jobseeker's Allowance

If you get Income Support, Pension Credit, income-related Employment and Support Allowance, or income-based Jobseeker's Allowance and owe more than a set amount on your fuel bill, you could ask the Department for Work and Pensions (DWP) to take weekly deductions from your benefit and pay them directly to the gas or electricity company.

This is called Fuel Direct and is part of the Third Party Deduction Scheme. This covers the gas or electricity you are continuing to use plus a standard amount towards the arrears. Contact your DWP office and tell the fuel company you are doing this.

Some fuel companies may tell you that there is no longer a direct payment scheme. Don't be put off. Make sure you apply to the DWP as they make the decision, not the fuel company.

If you are on Income Support, Pension Credit, income-related Employment and Support Allowance, or income-based Jobseeker's Allowance and you have been disconnected, you may be able to get a Community Care Grant or a loan from the DWP to cover the cost of having your supply reconnected.

You cannot get help with arrears from the DWP except very rarely through a crisis loan.

Other help

Contact the social services department of your local council or the DWP for help. The fuel company will delay cutting you off if they are told the social services or DWP are looking into your case.

They will usually hold action for 10 working days but may agree to delay longer. This could give you time to make an arrangement to pay. The Children's Act 1989 gives social services the power to make payments to families with children in certain circumstances.

If you are asked to repay money from a coin meter after a theft, or to pay a bill in somebody else's name, or if the company has set a token meter or budget scheme at a higher amount than you can afford, contact a local advice agency or contact us for advice.

Some fuel companies have set up trust funds that may be able to help you pay your fuel bills if you are in financial difficulties. Ask your fuel company if they run a scheme or contact us for details. You can also download a utility trusts booklet from the British Gas Energy Trust website.

Getting the best energy deal

You might be able to save some money by switching to another supplier. This may work out cheaper, particularly if you have both gas and electricity from the same supplier. Before you do this, check which company will be best for you.

There are a number of internet price-comparison companies who can help. Contact Consumer Direct or Ofgem for a list of authorised companies.

Check with your new supplier that they offer the same payment arrangements. You can complain about any supplier to the Energy Ombudsman. All suppliers should follow a code of practice when dealing with people in arrears.

Complaining about your energy supplier

You can complain to the new Energy Ombudsman about a billing or transfer problem.

Special problems for tenants

Your landlord may be responsible for paying the gas or electricity for your accommodation, and resell the fuel directly to you. Ofgem sets maximum charges your landlord can sell gas and electricity to you at. You can get advice from Consumer Direct about how much your landlord is allowed to charge you.

Contact your local advice agency or Consumer Direct if: you think you may have been overcharged for fuel; or the company is threatening to cut your supply off because the landlord has not paid the bill.

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