Energy Debt Help: Gas and Electricity Arrears

Why energy debt is a priority

Energy is a priority debt because the consequences of non-payment are serious. A supplier can eventually seek to disconnect supply or, in some cases, apply for a warrant to enter your home to fit a prepayment meter, although rules and industry codes of practice set limits to protect vulnerable customers. Because of this, energy should be paid before credit cardsHow Credit Cards Work in the UKHow UK credit cards work: interest, APR, minimum payments, interest-free periods, fees, Section 75 protection and how to use a card without getting into debt.Read more →, loans and catalogues. See priority and non-priority debts.

Step 1: Contact your supplier early

Tell your supplier as soon as you think you will struggle. Explain your circumstances and ask what help is available. Suppliers are expected to consider your ability to pay when agreeing repayment plans and to offer reasonable arrangements. Ask for:

1. A realistic repayment plan for any arrears, based on what you can afford
2. A review of your monthly payments so that your direct debit matches your use
3. Information about support schemes, including hardship funds and any discounts
4. A temporary break from repayments if you face a crisis

Step 2: Check your meter readings and bills

Wrong estimates are a common cause of arrears. Take a meter reading and send it to your supplier. Ask for a corrected bill. If you think you have been overcharged, you can challenge the bill. Citizens Advice has guidance on complaints and the energy ombudsmanFinancial Ombudsman Service (FOS)The Financial Ombudsman Service is a free, independent service that resolves complaints between consumers and financial firms.Read more → can help if you cannot resolve a dispute.

Prepayment meters

Some customers have prepayment meters, where you pay in advance. Debt can be recovered through the meter, with a share of each top-up going on arrears. If this is unaffordable, ask your supplier to reduce the repayment rate. Rules on forced installation of prepayment meters have been tightened, and suppliers must follow codes of practice and consider vulnerability before fitting one without consent. If you want to move off a prepayment meter and your debt is manageable, ask what is possible.

Fuel Direct

If you receive certain benefits and have energy arrears, you may be able to have payments taken straight from your benefit through a scheme called Fuel Direct, run by the Department for Work and Pensions. It can be useful if you want to stop arrears building, but it limits how much of your benefit you receive, so make sure you can manage on the remainder. Ask a free adviser whether it is right for you.

Help with the cost

• Warm Home Discount and similar schemes: Check eligibility and apply through your supplier or the government.
• Hardship funds: Many suppliers run funds to help customers clear debt. Ask.
• Grants and local help: Some local authorities, charities and landlords offer grants for energy bills or efficiency measures.
• Benefits check: Make sure you are claiming everything you are entitled to. GOV.UK has benefits calculators.
• Energy efficiency: Small changes can reduce bills. See how to cut household bills.

What if your supplier will not agree a plan?

Keep a record of your contact. Complain in writing and use the supplier's complaints procedure. If it is not resolved, you can take it to the energy ombudsman. In the meantime, speak to a free adviser at Citizens Advice, StepChangeStepChange Explained: What It Does and How It WorksWhat the debt charity StepChange offers, how its free debt advice and debt management plans work, who it suits and what to expect when you contact them.Read more → or National DebtlineNational Debtline: How It Works, When to CallWhat National Debtline is, who runs it, what it can help with, how to get free advice by phone, webchat or online tools, and what to expect.Read more →, who can contact the supplier for you. See free debt advice in the UK. If you face disconnection or a warrant, see urgent debt help.

Energy debts and formal solutions

Energy arrears are unsecured debtsUnsecured debtAn unsecured debt is borrowing that is not tied to an asset, so the lender cannot automatically take your home or car if you do not repay.Read more → and can usually be included in a Debt Relief Order, IVA or bankruptcy, but you must still pay for the energy you use after the solution starts. A debt management plan usually treats energy as a priority debt, with a separate repayment alongside the plan. Your adviser can show how to fit it in.

A worked example

Imagine you owe £600 to your energy supplier and cannot pay it in one go. You phone the supplier, explain you are struggling and send a budget. They agree to spread the arrears over 24 months and reduce your monthly payment. You ask to be put on the Priority Services Register because of a health condition, and you check your benefits and find you are missing Council Tax Reduction. A few weeks later your outgoings have fallen, and the arrangement is manageable. If the supplier had refused, your next steps would be a written complaint, a free adviser and, if needed, the energy ombudsman.

Keeping bills down in future

Take regular meter readings, ask for a review of your direct debit every few months and think about small improvements, such as draught-proofing and efficient heating controls. Check that your tariff is sensible, and ask the supplier about support schemes. A smaller bill means smaller risk of arrears.