Fuel poverty charity National Energy Action (NEA) has today welcomed Ofgem’s decision to ensure all energy suppliers across Great Britain provide more support for customers struggling in debt, identify pre-payment customers who run out of credit and offer appropriate forms of advice and support. The charity says energy suppliers should embrace the changes to build on their existing work to help ease the long-term economic impact of the pandemic for struggling energy customers.
Adam Scorer, Chief Executive of NEA comments:
“As incomes fall and more people are needing to spend longer at home using energy, millions of the poorest energy consumers are having to choose between heating their home adequately or falling into debt. It is therefore welcome to see Ofgem committing to these basic, yet vital, steps and ensuring they are in place for this winter. Suppliers should now look to embrace these new obligations to continue to help millions of customers who are wrestling with the long-term economic impact of the pandemic”.
The charity recently undertook research from frontline organisations who are supporting vulnerable customers during the pandemic. The research found that three quarters of respondents feel there is a high risk that fuel debt will increase this winter as a direct result of the pandemic, while 98% believe that there is a moderate or high risk of more households cutting back on their energy use due to being forced to spend more time at home during lockdown periods. The risks were found to be most acute for prepayment meter households, who found it more difficult to top up when asked not to leave their homes, and many of whom will be in significant debt even before this winter.
Scorer concludes:
“Households with traditional pre-payment energy meters have suffered significant difficulties during the crisis, much of which could have been avoided if they had smart meters. The industry needs a clear direction to significantly accelerate the smart meter roll-out for pre-payment customers as this can unlock even more opportunities to help offset the impact of the pandemic for struggling energy customers”.
Notes to editors
- National Energy Action (NEA) works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm and safe home. We aim to improve access to energy and debt advice, provide training, support energy efficiency policies and co-ordinate other related services which can help change lives.
- Even before the crisis energy debt was a significant issue for customers and the energy industry. In 2019, Ofgem reported that 1.3 million electricity customers and 1 million gas customers are repaying a debt to their energy supplier or are in arrears, figures that rose from the preceding year. Addressing the immediate impact of the crisis for pre-payment customers by improving their ability to vend and access emergency credit will help some indebted customers resolve some immediate issues they are facing.
- NEA has welcomed that suppliers agreed to help customers access professional debt advice, review bill payment plans, introduce possible payment breaks or potentially help reduce how much customers are asked to pay or conversely spread debt repayments over a longer period. In some cases suppliers are also providing support via to access hardship funds to have debts written off. This activity is welcome but again there is a large variance in what different suppliers are providing for customers. Coupled with low level of awareness that these options exist there are concerns that energy debt will spiral.
- The findings above were from the UK Fuel Poverty Monitor, published by National Energy Action (NEA) and Energy Action Scotland (EAS) in September 2020. This year the monitor focused on the impacts of COVID-19, conducting research with 73 unique organisations across the energy industry that are on the frontline of addressing fuel poverty. More information can be found in the report here.
