With energy prices rising again last Saturday, many are worried that they could end up with no power and gas to their home if they cannot keep up with payments.
But what are the consequences of not being able to pay energy bills – and can companies cut you off from your supply?
Here’s what our personal finance expert Gemma Godfrey says…
With energy bills soaring, a growing fear is that an inability to pay might result in being cut off. While that is a risk, it’s a last resort for suppliers, and they are under an obligation to try and help.
The regulator has told suppliers they must try and provide customers with payment plans that are affordable. The options they could consider and customers can request include reviewing payments, reducing payments, allowing a longer time to pay, access to a hardship fund or grants, advice on how to reduce energy consumption and support for those that are vulnerable.
Support for vulnerable customers is a free support service called the “Priority Services Register”.It’s important to have this conversation with a supplier because without it, they could take action. First of all, if a direct debit is cancelled, a customer could end up owing more money if they’re moved to a more expensive tariff.
If energy bills become overdue and arrears build up over time, a supplier could move a customer to a pre-payment meter, which can also be more costly. Alternatively, the debt could be passed over to a debt collection agency.
More on Cost Of Living Related Topics: Cost of livingThere’s also a risk that failing to pay energy bills might affect a credit score, which could affect other areas of a person’s financial life.
But suppliers must have tried to come to an agreement with a customer first, and the most drastic of action, cutting off supplies, is rare.
AdvertisementGemma is a business advisor, finance expert and TV host, an ambassador for the charity Surviving Economic Abuse, and a former boardroom advisor to Arnold Schwarzenegger on The Apprentice.
