Emergency credit will help keep the lights on this winter

As the unemployment figures rise and the thermometer falls, the energy regulator has announced new rules that will force gas and electricity suppliers to offer more help to customers struggling to pay their energy bills

Coming into force on 15 December, the policy changes will mean extra help for prepayment customers – many of whom are likely to be in what Ofgem described as “vulnerable circumstances” this winter.  

The new protections mean energy companies will have to offer emergency credit to customers struggling to top up their prepayment meter. 

That could be because they just don’t have the cash at that point, or because they can’t get to their local shop to top up due to, for example, mobility issues or the need to self-isolate.  

These customers will have a fixed amount of credit provided when their meter runs low or runs out to ensure continuity of supply.  

“Friendly hours credit” is also available overnight, at weekends and public holidays, when top-up points may be closed and a customer’s meter has run low or run out.  

And “additional support credit” is provided to customers in vulnerable circumstances who may have exhausted other options.  

None of this is free credit, though, and customers will have to pay for their energy they use – usually when they next top up.

Suppliers will also have to keep a closer eye on and offer extra prepayment credit for households in vulnerable circumstances to provide more breathing space while working out alternative arrangements to pay.


The aim of all this is to reduce the number of prepayment customers who go without energy or “self-disconnect” after running out of credit on their meter.  

Of the 4 million customers currently relying on prepayment meters, one in seven – around 570,000 people – felt they had to self-disconnect their supply at least once in the past 12 months.  

Prepayment customers are more likely to self-disconnect if they are in debt and are more likely to be vulnerable and in fuel poverty. Others “self-ration”, deliberately severely limiting their energy use to make their credit last longer or to save money for other services.

Recent research by Citizens Advice has found that almost 30 per cent of self-disconnects were the result of not having enough money; more than 10 per cent couldn’t top up because they were self-isolating; and another 10 per cent failed to top up because the top-up shop was closed.

Elsewhere, suppliers will have to put customers in debt on realistic and sustainable repayment plans.

This means suppliers will need appropriate credit management policies, make proactive contact with customers, and set repayment rates based on ability to pay.  

By March this year, as the initial Covid-19 crisis emerged, suppliers had voluntarily agreed to support vulnerable customers through the pandemic, including those on prepayment meters facing difficulties in topping up. The new licence rule will formalise these actions as obligatory.

“Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations,” says Philippa Pickford, director of retail at Ofgem.

“Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter.

“Alongside our wider programme of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.”

Bigger picture perils

In other news this week, the energy price cap has been extended until the end of 2021.

“Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health – especially during a global pandemic,” says Dame Gillian Guy, chief executive of Citizens Advice.

“We’ve been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we’re very pleased to see this announcement from the regulator.

“Even with this short-term support from suppliers, many people will still struggle to pay for the basics. Government needs to do more to support those who need it most, including making the temporary uplift to universal credit and working tax credit permanent.”

Last week new research from Citizens Advice showed significant numbers of people risk being pushed into a position where they can’t pay their essential bills and could face spiraling debts if the uplift to universal credit and working tax credit is not extended beyond April 2021.

“The government’s temporary changes to universal credit need to be extended, including maintaining fairer access to universal credit for the self-employed beyond November, and making the current temporary £20 a week uplift permanent,” warned Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline.

Anyone who is struggling or may soon struggle to pay their energy bills should contact their energy supplier as soon as possible because they may be eligible for extra help, depending on their circumstances. 

Free advice and independent help on managing debt and budgeting is also available from Citizens Advice, the Money Advice Service, National Debtline and StepChange Debt Charity.

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