How to avoid energy bill debts and how to pay your supplier back11/17/2019
After setting up a direct debit with my energy company, I just expected that it would be taken out each month.
But months later, I got a final payment notice telling me I owed them hundreds of pounds.
It turned out that they hadn’t set up the direct debit properly, I (stupidly) hadn’t noticed and I now owed them about £500.
To make it worse, my flatmate had been paying me his share every month so it all had to come from me.
As a recent graduate, I didn’t have that much money lying around and I really didn’t know what I was going to do.
Adding even more stress was the fact that when I did some meter readings, we had used more than out estimated usage and I had a total of £600 to pay back.
An unexpected energy bill can be a huge shock.
Figures from uSwitch last November showed that more than one in 10 bill payers in debt by £134 on average.
If you are in debt, there are some things you can do to avoid it becoming a problem. If you don’t come to a solution with your supplier, they may cut off your gas and electricity, so it’s important to try to find a solution.
This is mainly a problem for those who pay for energy after they use it by a bill or direct debit – but there are some people on prepayment meters and the Citizens Advice Bureau has some tips.
How to avoid getting into debt with your energy supplier
The best way to avoid owing your energy supplier anything is to keep a really close eye on your bills. Review your current tariff and consider another provider if they are cheaper.
If you are happy with your tariff, make sure your bill or direct debit is paid on time and do a meter reading every month to avoid estimated costs, which can be incorrect and lead to a much higher bill than you expect when you do eventually do one.
You can also keep your bills low and affordable by simply using less energy. Use energy-saving bulbs, do what you can to insulate your home and be aware of simple things like turning lights off and only boiling what you need in the kettle.
What to do if you are in debt with your energy supplier
After speaking to my energy supplier, I was able to set up a payment plan and slowly pay back the money I owed at a level that was affordable.
Within a year, I was back in credit and after switching to a new provider, I have been much more careful to avoid getting into debt.
If you are struggling with payments or find that you owe more than you expected, speak to your supplier about a solution.
Although it might take some time and effort, each provider has procedures in place to help and without having a conversation with them and setting up a plan, you can face being cut off for not paying your bills.
Demand notices from energy suppliers can seem frightening but it is just to encourage you to find a solution with them.
A payment plan should cover the amount you owe and your current use. You should agree to pay a certain amount over a set period of time.
You can give your energy supplier information about your income., outgoings, debts and personal circumstances so they know what you can afford.
They will continue to estimate your bills based on past usage but giving them meter readings will make this more accurate so if you are paying too much for your usage, you can cut down this part of the payment plan but if you are using more energy than you are paying for, you should increase your payment to avoid more debt.
What to do if you’re in debt and use a prepayment meter?
With a prepayment meter, you can set up an agreement with your energy supplier that you pay back some of the debt every time you top up. For example, £5. If you are struggling to afford this, speak to your energy supplier about reducing the amount you payback.
They must take into account what you can afford so if your circumstances have changed and you are struggling, let them know.
What if you can’t afford the energy supplier payment plan?
If you find that the payment plan is too high or your circumstances change, you can ask your supplier to lower the payments. However, they don’t have to agree to this.
If you fail to make payments on the plan or can’t come to an agreement with your supplier, they may force you to instal a prepayment plan instead, which can be much more expensive in the long term.
There are some grants available for people struggling to pay their energy bills. The British Gas Energy Trust scheme is open to anyone, even if you are not a customer. Some suppliers also have their own schemes specifically to help their customers.
If you were born before 5 August 1953, you are entitled to the winter fuel payment to help you heat your home through winter.
Cold weather payments are also available for those on pension credit, income support, income-based jobseeker’s allowance, income-related employment and support allowance and universal credit.
You may also be able to get £140 off your electricity bill under the warm home discount scheme if you’re either getting the guarantee credit part of Pension Credit or on a low income.
You can find out more information about energy grants available to you through Citizens Advice.
Can you switch provider when you are in debt with your current supplier?
Yes, you are entitled to switch your provider, even if you are in debt. You will continue making payments towards the payment plan but no longer make the payments for your current and future usage.
Instead, you will make separate payments to your new provider.
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