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Ofgem’s new plans to help struggling energy customers

We are pleased to inform you of some new changes coming into play in the coming months that benefit those struggling with their energy bills.

With the impacts COVID19 has had on household income, protecting those at risk is a priority for all – including energy companies.

Helping not hindering those struggling to pay their bills

From 15 December 2020, Ofgem will introduce new rules to help customers who are struggling to pay their energy bills. Ofgem is the national energy regulator, and has updated its license rules to formally require suppliers to help in a variety of ways:

  1. They have stated they want to make sure energy companies have appropriate credit management policies
  2. They must become more proactive in contacting customers struggling
  3. They must set up realistic repayment plans based on the customers financial situation and what they can afford.

Prior to this, debt may have been allowed to build up with no one checking in on vulnerable consumers; payment plans may have driven individuals further into debt; and there was no obligation for energy companies to take responsibility and act. If you are familiar with any of these experiences, please contact our energy advocate, who is able to help deal with these issues on your behalf.

On a prepayment meter?

Emergency credit from energy providers will be provided to vulnerable households who cannot top up their prepayment meter to allow for a longer-term plan to be put in place. It is hoped that this will help reduce self-disconnection: which is where customers are not able to top up their meters and are left without gas or electricity until they can afford to reconnect.

Self-disconnection remains a significant problem. According to Citizens Advice, around 16% of consumers with prepayment meters self-disconnect at least once a year. Emergency credit will help tide people over with their energy while they seek other financial help.

A positive from lockdown and COVID-19?

During the first lockdown in March, suppliers voluntarily agreed to support customers who had been negatively affected by the pandemic, particularly those who are considered vulnerable. A positive outcome from lockdown is that these measures have been extended and expanded with increased recognition that lots of people need some extra help this year.

Research by Citizens Advice estimates that 6 million people in the UK have fallen behind on paying at least one household bill during the pandemic – evidence that this support is needed now more than ever. A warm home is so important for our health and wellbeing, so these new measures from Ofgem are very welcome!

We hope these new rules will help, but if you need further support and advice, we at Warm and Well are available to help all year round.

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