Paying for Energy

If the bill is unexpectedly high, advise a meter reading to check for accuracy read

An unexpectedly high bill may be caused by the meter being misread, or by a succession of underestimated bills followed by an accurate bill.

Contact the individual's energy supplier

If a individual cannot afford to pay their bill, the priority is to contact their energy supplier as soon as possible to agree a payment plan. Remembering that:

the ability to pay is the main criterion in working out affordable repayment of debt
people can be over-optimistic about their ability to repay debt. Individuals should be encouraged to pay what they can reasonably afford over a reasonable time period
many energy suppliers offer special payment plans to help those in debt, often with an advantageous low debt recovery level
Many fuel utilities have Trust funds to help their clients out of debt Click here for details or go to this page.

Obtain a copy of the Code of Practice on Payment of Bills

The individual should be advised to obtain a copy from their energy supplier. It includes details of:

the range of available payment methods
procedures for dealing with customers in difficulty and options available to prevent disconnection from supply.

Customers will not be disconnected if:

a payment arrangement is kept to or a prepayment meter is installed
the supplier is aware that there are young children or elderly residents or other vulnerable persons in the house

Other local agencies may be able to offer assistance:

Money Advice Agency
Citizens Advice Bureau
Welfare Rights Office

Special circumstances

If the individual is elderly, chronically sick or disabled go to the other information section.

Explore other payment options

Energy suppliers offer a wide range of payment options but it is important to consider the difficulties as well as the benefits associated with all payment arrangements before deciding.
Although a prepayment meter may work as a budgeting aid for some consumers, for many it is a more costly and often inconvenient method of payment with the risk of being left without a fuel supply if the key or card runs out.
On the other hand, whilst Direct Debit generally offers the lowest fuel costs and can be extremely convenient, monthly payments may be insufficient to cover all charges. Households without a bank account cannot use Direct Debits.

PAYMENT OPTIONS FOR CUSTOMERS IN DEBT

Payment Type	Advantages	Disadvantages	Who it would suit
Weekly/Fortnightly/Monthly budget payments	Small payments on a regular basis (usually made with a card)	Possible inconvenience and travelling costs to reach payment agents Some Post Offices and banks may charge you when you use their facility to make payments	Households without a bank account Households repaying debt
Card meter/Token meter/ Key meter	Pay for energy as you use it, therefore no large bills Can budget according to means No risk of theft from key meter, key specific to one user Debt reduces by a set amount each week	More expensive way to pay for fuel than direct debit because of higher costs incurred by meter and payment network Limited number of payment agents Possible inconvenience and travelling costs to reach payment agents Customers need to understand how standing charges and debts are taken through the meter so that they know their available credit If credit runs out there is limited emergency credit before supply is disconnected	Those who want a prepayment meter fitted and don’t find access to payment agents a problem Customers who want to avoid getting into debt or who want to manage an existing debt
Fuel Direct Energy suppliers are required to offer this payment option to customers. However energy companies and the Department for Work and Pensions may be resistant to Fuel Direct arrangements	Payment for current use of energy and debt taken directly out of benefits Energy expenditure and debt repayment evenly spread Less expensive for consumers in debt than some other methods (e.g. prepayment meters)	If current consumption is more than the amount paid through benefit, money will start to be owed and deductions will have to be increased No flexibility in budgeting	Only for those on Income Support, Income-Based Jobseekers' Allowance or Pension Credit who are, or have been, in energy debt. Particularly suitable for those with ill health or mobility problems
Monthly Direct Debit/Standing Order	Payment is the same time and amount every month, which may help with budgeting With Direct Debit once the arrangement has been established, there is no need for further action on the customer’s part The Direct Debit payment method is the easiest for companies to administer, so discounts can be given The Standing Order payment amounts can easily be changed to cover increases/decreases in consumption With Standing Order the customer has more control over payments made	May be paying too much/too little if bills have been estimated If payments have not been adjusted to cover changes in consumption a balance may be owing which may need to be paid in full at some time during the year Bank charges may be incurred if payments cannot be claimed due to insufficient funds / overdraft charges may apply When payment amounts need amending on a Standing Order the customer has to contact the bank/building society	Households with regular income Households with a bank/building society account Those who find monthly budgeting easier than quarterly Those who have experienced temporary financial difficulty and would prefer to spread amounts owing over a period of time
OTHER PAYMENT OPTIONS
Quarterly/Bi-monthly	You pay for what you have used over the previous two or three months Number of payment methods available: Telephone/Computer Banking, Debit Card payments on internet, Credit/Debit card payments via supplier	Difficult to budget because of large differences in summer/winter bills. If estimated bills are inaccurate the customer could either overpay or have to make up underpayments at a later date May incur late payment charge	Household whose income is stable and can accommodate fluctuating energy bills
Quarterly Direct Debit	Payment will be taken from your bank/building society automatically Once the arrangement has been established, there is no need for further action on the customer’s part	Have to make sure bank/building society account has enough funds to cover the bill Discounts are less likely Bank charges may be incurred if payments cannot be claimed due to insufficient funds	Households with regular income Households with a bank account Those who are able to budget easily
Pay as you go (regular cash payments of any amount at payment agents)	Flexible. Can pay cash as and when it is convenient	Payment may not be enough to cover the quarterly bill Any outstanding amount will have to be paid when you receive a bill	Those with irregular incomes e.g. the self-employed, employees who do varying amounts of overtime Those with a fixed low income but irregular outgoings e.g. the unemployed

Payment Type

Advantages

Disadvantages

Who it would suit

Weekly/Fortnightly/Monthly budget payments

Small payments on a regular basis (usually made with a card)

Possible inconvenience and travelling costs to reach payment agents

Some Post Offices and banks may charge you when you use their facility to make payments

Households without a bank account

Households repaying debt

Card meter/Token meter/ Key meter

Pay for energy as you use it, therefore no large bills

Can budget according to means

No risk of theft from key meter, key specific to one user

Debt reduces by a set amount each week

More expensive way to pay for fuel than direct debit because of higher costs incurred by meter and payment network

Limited number of payment agents

Possible inconvenience and travelling costs to reach payment agents

Customers need to understand how standing charges and debts are taken through the meter so that they know their available credit

If credit runs out there is limited emergency credit before supply is disconnected

Those who want a prepayment meter fitted and don’t find access to payment agents a problem

Customers who want to avoid getting into debt or who want to manage an existing debt

Fuel Direct

Energy suppliers are required to offer this payment option to customers. However energy companies and the Department for Work and Pensions may be resistant to Fuel Direct arrangements

Payment for current use of energy and debt taken directly out of benefits

Energy expenditure and debt repayment evenly spread

Less expensive for consumers in debt than some other methods (e.g. prepayment meters)

If current consumption is more than the amount paid through benefit, money will start to be owed and deductions will have to be increased

No flexibility in budgeting

Only for those on Income Support, Income-Based Jobseekers' Allowance or Pension Credit who are, or have been, in energy debt.

Particularly suitable for those with ill health or mobility problems

Monthly Direct Debit/Standing Order

Payment is the same time and amount every month, which may help with budgeting

With Direct Debit once the arrangement has been established, there is no need for further action on the customer’s part

The Direct Debit payment method is the easiest for companies to administer, so discounts can be given

The Standing Order payment amounts can easily be changed to cover increases/decreases in consumption

With Standing Order the customer has more control over payments made

May be paying too much/too little if bills have been estimated

If payments have not been adjusted to cover changes in consumption a balance may be owing which may need to be paid in full at some time during the year

Bank charges may be incurred if payments cannot be claimed due to insufficient funds / overdraft charges may apply

When payment amounts need amending on a Standing Order the customer has to contact the bank/building society

Households with regular income

Households with a bank/building society account

Those who find monthly budgeting easier than quarterly

Those who have experienced temporary financial difficulty and would prefer to spread amounts owing over a period of time

OTHER PAYMENT OPTIONS

Quarterly/Bi-monthly

You pay for what you have used over the previous two or three months

Number of payment methods available: Telephone/Computer Banking, Debit Card payments on internet, Credit/Debit card payments via supplier

Difficult to budget because of large differences in summer/winter bills.

If estimated bills are inaccurate the customer could either overpay or have to make up underpayments at a later date

May incur late payment charge

Household whose income is stable and can accommodate fluctuating energy bills

Quarterly Direct Debit

Payment will be taken from your bank/building society automatically

Once the arrangement has been established, there is no need for further action on the customer’s part

Have to make sure bank/building society account has enough funds to cover the bill

Discounts are less likely

Bank charges may be incurred if payments cannot be claimed due to insufficient funds

Households with regular income

Households with a bank account

Those who are able to budget easily

Pay as you go (regular cash payments of any amount at payment agents)

Flexible. Can pay cash as and when it is convenient

Payment may not be enough to cover the quarterly bill

Any outstanding amount will have to be paid when you receive a bill

Those with irregular incomes e.g. the self-employed, employees who do varying amounts of overtime

Those with a fixed low income but irregular outgoings e.g. the unemployed

Getting legal help

Law Centres Federation
020 7387 8570
18/19 Warren Street, London,
W1P 5DB
Health and Housing Group
020 7233 7780 120
Wilton Road, London,
W1V 1JZ
The Law Society
020 7242 1222
113 Chancery Lane, London,
WC2A
Federation of Independent Advice Centres
020 7489 1800
4 Deans Court, London,
EC4V 5AA

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