Fuel Direct

Fuel Direct is a government scheme that helps people on certain benefits manage their energy bills. If you’ve fallen behind on payments, it lets your energy debt be paid directly from your benefits, helping you stay on top of costs.

Key takeaways

• Fuel Direct is a type of third party deduction for people on benefits who are in debt to their energy supplier.

• The scheme helps people on certain benefits manage their energy bills by deducting a fixed amount directly from their benefits to pay for energy debt and ongoing energy use.

• If you’re struggling with energy debt and energy bills, you can apply for Fuel Direct via your energy supplier. It will arrange deductions with the department for work and pensions (DWP).

• You can only apply for Fuel Direct if you receive Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, Pension Credit or Universal Credit.

What is Fuel Direct?

If you are on benefits and struggling to pay your household bills, DWP can deduct money from your benefit and pay it to a creditor or supplier to clear a debt. The deductions are called ‘third party deductions’.

Fuel Direct is a government scheme that allows energy debt to be paid via a third party deduction.

Before applying for Fuel Direct, talk to your energy supplier about getting help with your bills.

How does Fuel Direct work?

A fixed amount is deducted from your benefit and sent straight to your energy supplier. The payment is split between

• Your ongoing energy use

• Your energy debt

• This reduces the risk of disconnection and spreads debt repayments over time.

Am I eligible for Fuel Direct?

You may be eligible for Fuel Direct if you're receiving any of the following benefits:

• Income-based Jobseeker’s Allowance

• Income Support

• Income-related Employment and Support Allowance

• Pension Credit

• Universal Credit

To be eligible, you’ll need to be in arrears with your energy supplier and unable to agree a repayment plan with your supplier.

The government website says: “Other methods to recover the debt must have been tried, for example negotiating different ways of paying and managing bills. There must be a real possibility of enforcement action before consideration is given to applying for a deduction.”

How do I apply for the Fuel Direct scheme?

You’ll need to apply for Fuel Direct via your energy supplier. Most fuel suppliers have information about Fuel Direct on their website.

Your supplier will check your benefits and arrears situation, and consult the Government’s guidelines on Fuel Direct. If Fuel Direct is the best option, it will provide a monthly quote for both your energy usage and outstanding debt balance.

If your supplier agrees you can use Fuel Direct, your supplier will ask the department for work and pensions (DWP) to set it up.

The DWP will notify you about the deductions, the amount that will be taken from your benefits and how this will be split between debt repayment and ongoing bills.

If you’re on Universal Credit, deductions will be taken monthly; if you’re on other benefits, deductions will be taken weekly.

How do I apply for the Fuel Direct scheme if I am on Universal Credit?

If you’re on Universal Credit, the process for Fuel Direct works like this:

• Contact your energy supplier – let it know you’re struggling with arrears and you want to use Fuel Direct.

• Your supplier will check your eligibility, confirm your situation and request deductions.

• For Universal Credit, Fuel Direct is arranged through a “Managed Payment to Supplier.”

• The DWP will set this up and the payment, which will be split between your arrears and energy use, will be deducted from your monthly Universal Credit.

• You’ll be notified of how much is taken and when payments start.

If you claim Universal Credit, payments for energy debts are capped at 5% of your standard allowance, while the estimate for ongoing energy bills should not exceed 25% of your total benefit. This ensures deductions stay affordable and leave enough for essential living costs. If you need assistance or have questions, you can use your online Universal Credit account, or call 0800 3285644 to speak with someone on the Universal Credit helpline.

How do I apply for the Fuel Direct Scheme if I am on JSA, ESA, or Income Support?

If you’re on Income Support, Jobseeker’s Allowance (JSA), or Employment and Support Allowance (ESA), the process for Fuel Direct works like this:

• Contact your energy supplier – Explain that you’re in arrears and would like to set up Fuel Direct.

• Your supplier will check your eligibility, confirm your situation and request deductions with DWP.

• The DWP will confirm your benefit type and arrange deductions.

• Money will be taken weekly from your benefit payment. A portion goes toward your current bill, and the rest towards clearing arrears.

• You’ll receive confirmation from DWP about how much will be deducted and when payments start.

The main difference compared to Universal Credit is that payments are taken weekly instead of monthly.

If you're receiving income-related JSA, income support, or ESA, you can contact Jobcentre Plus for guidance on setting up Fuel Direct. It’s available on 0800 169 0310.

How do I apply for the Fuel Direct Scheme if I am on Pension Credit?

If you’re on Pension Credit, the process for Fuel Direct is the same as for Income Support, Jobseeker’s Allowance (JSA), or Employment and Support Allowance (ESA) – as above.

Money will be taken weekly from your benefit payment.

Those on Pension Credit can contact the pension service on 0800 7317898 for help.

Ways of keeping energy costs down

While Fuel Direct can help manage your energy bills, you should also look at other ways to keep costs down. If you're considering a switch, you can compare energy suppliers with MoneySuperMarket.

It’s also worth taking a look at our top 10 energy saving tips for some simple ways to bring down the cost of your bills.

Government schemes for energy bills

Several schemes can provide additional support to help you pay your energy bills:

The Warm Home Discount offers a £150 discount on electricity bills for eligible low-income households and pensioners

The Cold Weather Payment is activated by cold temperatures and is available to those on certain benefits

For those born on or before 22nd September 1959 the Winter Fuel Payment provides money towards heating costs. But if your income is over £35,000, HMRC will take your Winter Fuel Payment back.