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How to Manage Your Energy Debt?

How to Manage Your Energy Debt?

Energy crisis is a global issue, growing fast everywhere. Electricity and gas are basic commodities, without which you cannot lead a civilised life, but as per-unit energy costs are mounting up, it is becoming tough for people across UK to pay their energy bills, and eventually they get tangled in energy debts.

So whether you are currently under an energy debt or not, it is important that you understand the basics to deal with them. It involves smarting your decisions, like paying your bills on time to avoid overpaying outdated-tariffs, in addition to moderating your gas and electricity consumption.

The urban myth that energy supplier cannot be switched while you’re in debt of your previous supplier, is completely false. As a designated rule, if you owe the company less than £500, on a prepayment metre you can switch to a cheaper supplier. Even on a standard metre, there is a chance that you can switch. The number of switches has been limited due to debt, under OFGEM guidelines.

Download the factsheet, to learn more about energy debts.

How to tackle energy debts?

Our first advice might come to you as a surprise, but your energy supplier might have some solutions for you. What you must do, is to call their helpline and inform them of your current situation, hopefully they will come up with a few suggestions. They will also guide you about how to pay your debt, how to shun getting further into it, how much you owe them and whether the amount can be paid in instalments.

Payment Plans

Few highly reputable energy providers also extend prepayment plans, based on weekly, fortnightly or monthly intervals and may or may not include your standing bill. When requesting for such payback facilities, keep in mind they are not legally bound to offer you that. It is however more likely, that you will be given a few options. In rare cases, where consumers are not able to keep up with the payments, your supplier might further negotiate terms of instalments.

Prepayment Meters

If you are not able to keep up with your payment plans, your energy supplier may suggest you to get a prepayment metre to ensure you don’t fall further behind in debt to them. A prepayment metre, as the term suggests, has to be precharged with balance, payable through a key or a smart card, thus enabling you to pay your energy debt along with the standing charges, keeping the both in control. The negative side of this proposition is that the prepayment metres are expensive than standard metres, and if you are not able to ‘top-up’ your prepayment metre, you will lose power supply.

Warm Home Discount

Previously ruled as social energy tariffs, these are special discounts on an energy bill, offered across the entire energy industry. They are applicable to you if you’re elderly, face fuel poverty, have a very low income, or if you are living on benefits. To learn more about Warm Home Discount, call the helpline of your subscribed energy supplier.

Third Party Deductions

As already mentioned, people on benefits can receive concessions in various forms. One option is to have an arrangement with the supplier to pay off your energy debt through small weekly deductions from your benefit payments, known as third party deductions. If you feel this is the right option for you, get more information from the Citizen’s Advice Bureau or Job Centre Plus regarding your situation.

Power Disconnection

This only happens when you leave no option for your energy company. Yes, it can be rare, but a possible situation. Before cutting you off from your power supply, the supplier is bound to wait 28 days after sending your bill, in addition to a week’s final notification. If by then, you couldn’t respond to them at least at some level, they are fully authorised to take this action. Under few conditions, including long-term health problems, disability and serious financial crisis, you can get amnesty from being disconnected.

Consumption habits

Last but not the least, if you curb your regular usage of gas and electricity, it can have an incredible impact on your situation. Whether you have a standard metre or a prepayment metre, avoid excessive energy consumption. Turn off the lights of your room as you leave, shut down all home appliances when heading out for office, switch all the bulbs to energy savers, likewise ampere-friendly electronic devices can also cut down some burden off your bills.

We have learned that energy debts are imminent problems faced by hundreds of thousands living in United Kingdom. If you are under an energy debt, you can cope with the circumstances by improving your power consumption habits and understanding your energy bills. Otherwise, carelessness could lead to worst scenarios and even derive you of energy.

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