Coronavirus: People to get emergency help to pay energy bills

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A man and woman worrying about paying their energy billImage source, Getty Images

Energy regulator Ofgem is introducing new rules from 15 December to help vulnerable customers who struggle to pay their energy bills this winter.

Suppliers will be required to offer emergency credit to customers who cannot top up prepayment meters.

And if customers are in debt, suppliers must put them on "realistic and sustainable" repayment plans.

In March, suppliers voluntarily agreed with the government to support people affected by the pandemic.

Now Ofgem has updated its licence rules to formally require suppliers to help customers in financial difficulty.

The industry watchdog said those in financial distress would get some breathing space, but ultimately all customers will need to pay for the energy they use.

This follows Ofgem cutting the price cap on default tariffs and prepayment meters, due to falling gas wholesale prices, which means cheaper energy bills for millions of people this winter.

"Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations," said Ofgem's director of retail Philippa Pickford.

"Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter."

From 15 December, suppliers will be required to offer emergency credit or extra prepayment credit to households in vulnerable circumstances.

This could be because people are temporarily unable to afford to top up their prepayment meters, or are unable to visit their local shop due to having to self-isolate or having a mobility issue.

Image source, Getty Images
Image caption,
Energy suppliers need to offer emergency credit to people on prepayment meters who are temporarily unable to top them up

Ofgem wants to reduce the number of prepayment customers who run out of credit and end up being without energy.

The regulator also wants to make sure that suppliers have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on their ability to pay.

In September, Citizens Advice estimated that 6 million people in the UK have fallen behind on paying at least one household bill during the pandemic, and that many more are on the cusp of being unable to afford to make ends meet.

"This raft of new protections from Ofgem should help more people who are struggling to stay afloat," said Citizen Advice's chief executive Dame Gillian Guy.

"Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health - especially during a global pandemic.

"We've been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we're very pleased to see this announcement from the regulator."

However, she warned that many consumers will still struggle to "pay for the basics", even with help from energy suppliers.

Dame Gillian added: "Government needs to do more to support those who need it most, including making the temporary uplift to Universal Credit and Working Tax Credit permanent."