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Energy debt: What to do if you're in debt to your energy supplier

Energy debt: What to do if you're in debt to your energy supplier

Getting into energy debt can be a concern, but there is help out there for those who need it.

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If you're in debt to your energy supplier, you're not alone. Thousands of people throughout the UK struggle to pay for their energy. However, falling behind on your energy payments doesn't have to lead to your power being switched off.

What to do if you're in energy debt

Millions of households across the UK are languishing on outdated and overpriced tariffs from expensive suppliers. You can deal with energy debt in a number of ways, and the first and easiest one is to switch to a cheaper energy plan.

This course of action will immediately see you paying less for your energy, meaning that you can redistribute the money that you've saved and put it towards paying off your debt.

You should be able to switch if you've been in debt to your supplier for less than 28 days. If you've been in debt for longer than that, you'll need to repay the debt before you can switch to a different company.

If you can't (or don't want to) switch, then your first port of call should be your energy supplier. It is on your side when it comes to your debt - it's in everyone's interest that the situation is resolved.

Call them or write to them to discuss the situation and find out what they can do to help you. Your supplier must also give you information on how to avoid getting into debt, about how you can pay back your debt, and a list of the money you currently owe.

Energy debt

As well as giving you tips on ways to avoid getting into energy debt in the first place, your energy supplier can set up a repayment plan so you can pay back your energy debt gradually. Although your supplier is not required by law to offer you a way of repaying your debts that takes your financial situation into account, it is likely to.

Repayment plans space your energy payments out over time so you don't have to pay large lump-sums all at once. They can be weekly, fortnightly or monthly, and will include a portion of your current use and a portion of your debt.

If you are already on a repayment plan, but can't manage the payments, you may be able to renegotiate with your supplier so that it is more affordable.

Prepayment meters

If you've been told you can't switch suppliers due to your debt, ask how much you owe. Households owing £500 or less per fuel on prepayment meters must be allowed to switch, according to Ofgem's Debt Assignment Protocol.

If your switch is blocked due to debt, you can make a complaint. If you need help, read our guide on energy complaints.

If you're facing the prospect of being disconnected, your energy supplier may suggest that you switch to a prepayment meter, which will ensure you don't fall further behind in debt to them.

A prepayment meter allows you to pay off your energy debt at the same time as you pay for the gas and electricity you use.

You prepay for your energy with a token, key or smartcard that you top up like a pay-as-you-go mobile phone.

However, if the money you top up your prepayment meter with runs out, you will not be able to get gas or electricity. Prepayment meters can often be more expensive than a standard meter.

On the other hand, a prepayment meter puts you in control of exactly how much you spend on your gas and electricity, and is likely to change your energy habits around the home, whether it be turning the lights out in every room or switching to energy-saving lightbulbs. Find out more about prepayment meters and how to get the cheapest prepayment energy plan here.

Warm Home Discount

The Warm Home Discount is aimed at alleviating financial pressure on those at risk of fuel poverty. It takes the form of a rebate on the energy a household uses between October and March, when it's likely to see the highest usage. To learn more you can read our dedicated Warm Home Discount guide, or call the dedicated Warm Home Discount helpline on 0800 731 0214 from 8.30am to 4.30pm on Monday to Friday.

Deductions from your benefit payments

Some people on benefits can arrange to pay off their energy debt by way of small weekly deductions from their benefit payments, known as third party deductions.

You can get more information from the Citizen's Advice Bureau and Job Centre Plus.

Disconnection of your energy supply

It's rare for people to have their gas and electricity disconnected, because it really is a last resort for energy suppliers, but it can happen.

Your supplier has to send you a disconnection notice before they can disconnect you, and it can't send this until at least 28 days after it sends your bill. It also has to give you at least seven days' written notice first.

If you are a pensioner, have long-term health problems, are disabled or have serious financial problems, there are extra measures in place to protect you against being disconnected.

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