Ofgem, the UK energy regulator, has confirmed plans to strengthen protections for customers who are struggling to pay their energy bills this winter. Following a consultation in June, Ofgem is introducing new licence rules for suppliers from 15 December.
One of the rules is that it will require suppliers to offer emergency credit to customers struggling to top up their prepayment meter, many of whom are likely to be in vulnerable circumstances.
But customers should not assume everyone will automatically get emergency credit that is why it is best to contact your energy supplier direct to explain your individual situation. Reasons for the credit could be because they temporarily cannot afford to top up or get to their local shop to top up because of a mobility issue or due to self-isolation for example.
Suppliers will also have to offer extra prepayment credit for households in vulnerable circumstances to provide more breathing space while working out alternative arrangements to pay. These requirements will help reduce the number of prepayment customers who go without energy or “self-disconnect” after running out of credit on their meter.
In March this year, suppliers voluntarily agreed to support vulnerable customers through COVID-19, including those on prepayment meters facing difficulties in topping up. The new licence rule will require suppliers to offer this extra protection.
Another new licence rule Ofgem is introducing will require suppliers from 15 December to put customers in debt on ‘realistic and sustainable repayment plans’.
This means suppliers will have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on ability to pay, stated Ofgem. Many suppliers already have this in place, but making it a formal licence requirement will ensure more customers are helped.
Philippa Pickford, Director of Retail at Ofgem, said: “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.
“Alongside our wider programme of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.”
Andrew Field, utilities expert and SVP at Teleperformance Group UK and South Africa, said, “To meet individual customer needs this winter, providers should listen to their customers first and foremost and then provide an informed set of payment options and bundles, and highlight how these different choices can provide them relief. By showing an understanding of the longevity of their financial situation, and reasons for non-payment, suppliers can show customers a committed level of empathy.”
Field also suggested that energy providers should also look to leverage data-intelligent solutions to track the evolution of household energy demands, and gather insights on consumption habits, so they can accurately predict and manage customer needs.
“Suppliers that step up during this crisis, and can create a lasting, positive memory in the minds of their customers when they are most vulnerable, are most likely to retain them long after the crisis and thrive long term. Those who do not are likely to join the 20+ suppliers that have declared bankruptcy since 2016.,” said Field.
If you are experiencing small business energy bill debt, then you should speak to your energy supplier and if necessary also get in touch with Business Debt Line.
Ofgem is hiring. If you are interested in working in the public sector, check out the latest job listings here including fixed-term contract positions.