Being in debt to your energy supplier can be extremely worrying, and it can seem impossible to find a way to pay off what you owe.
However, if you are on income support, job seekers allowance, pension credit or employment and support allowance you may find that you are eligible for the Fuel Direct scheme.
This is where a fixed amount (usually £3.55) is taken directly from your benefits by the Department of Work and Pensions and paid to the supplier to help clear your debt. A further amount may also be taken to cover your current energy use.
So, for example, if you have £100 of debt on your electricity account, and you use an average of £10 of electricity each week, you would pay £3.55 towards what you owe, and then you might pay an additional £10 for your ongoing energy use. That means a total of £13.55 a week would come out of your benefits each week for energy. Whilst deductions are made from your benefits every week they are only paid to the supplier every 13 weeks.
Once the debt has been cleared, you will usually be taken off the Fuel Direct scheme. In special circumstances however, you may be allowed to remain on the Fuel Direct scheme to carry on paying for your current energy use, so that you don't run into financial difficulties again.
When you are back on track, you should pay for your gas and electricity by monthly direct debit, as this will not only ensure you always make your payments on time, but most energy suppliers offer valuable discounts if you pay this way.
To apply for the scheme you should contact your local Jobcentre Plus or Pension Service to see if you qualify.
Pros and cons of paying through the fuel direct scheme
If you use the Fuel Direct scheme, then you have peace of mind that your debt is gradually being cleared. If you are also paying for your ongoing energy use, then you know you won't end up slipping further into debt.
However, if you are on benefits, you may already be finding it difficult to make ends meet, and having money coming out of your income could prove a real financial strain. Many people also don't like not being in control of their payments themselves.
Other ways to keep costs down
If you are struggling to cover the cost of your energy bills, make sure you aren't paying more than you need to for your gas and electricity.
You can compare tariffs online through MoneySupermarket's energy channel to find the best deals, and if you find a cheaper quote and aren't locked into your current tariff, you should switch as soon as possible.
You should also look into ways that you can conserve energy and therefore reduce your gas and electricity bills. Check with the Energy Saving Trust to see if you might be eligible for any grants towards energy-saving measures such as cavity wall insulation, and make sure you draught-proof your home to stop heat escaping.