Energy debt legal action doubles – what to do if you're struggling to pay

The number of households seeking help to deal with court action over their unpaid energy bills has doubled in the last year, according to Citizens Advice.

Although currently affecting a small proportion, there was an increase last year in the number of people assisted by the charity who received county court judgments (CCJs) from their energy suppliers.

A CCJ can impact someone’s finances for years, leaving them paying higher costs on loans, credit cards and mortgages.

Citizens Advice added that this type of court order can also compel people into payment plans they can’t keep up with.

The charity has said the use of legal action to crack down on unpaid bills appeared to have increased since the industry regulator, Ofgem, introduced tighter restrictions on the forced installation of prepayment meters.

Business energy comparison experts at Bionic have shared some tips on how to lower the cost of their energy bills by reducing their usage, and what to do if people are struggling to afford their energy bills.

What support does your energy provider have to give you?

According to Bionic’s business energy comparison expert Les Roberts, the most important step people should take if they feel they cannot afford their energy bill is to contact their supplier. This is because they are obliged to outline the options, such as organising a payment plan.

Mr Roberts said: “Under official Ofgem rules, your provider must organise an affordable payment plan and as part of this, consumers have the right to ask for a bill review to see if the amount is correct, a break from payments until you can afford to pay, a reduction to an affordable rate, access to advice on how to reduce energy usage, or more time between payments.

“Your provider must also give you access to any available hardship funds, charitable grants or help you apply for any available Government grants if they have not been automatically applied.

“One such example is the Cold Weather Payment which is available once the temperature drops below a certain level and you are state pension age or claiming Universal Credit/ Jobseekers Allowance.”

What does my supplier have to do if I can’t pay my bill?

According to Mr Roberts, suppliers are obliged to allow at least 28 days to repay any debts before they take action.

After this point, Mr Roberts said: “Your supplier can take steps to install a prepayment meter in your home but they have to give at least seven days notice.”

Mr Roberts noted: “The prepayment meter should be a last resort. Your provider should first offer you a repayment plan or help to set you up with a repayment plan through your state benefits.”

If all conditions are met and the supplier supplies all the assistance, and people still refuse to pay, they do have the right to gain a warrant to enter a person’s home. They can then install a prepayment meter or change the smart meter setting to a pay-as-you-go setup.

However, Mr Roberts added: “The provider is also obliged to move your prepayment meter to a more accessible location if you are struggling to access it. For example, if you are disabled or have limited mobility and the prepayment meter has been installed out of your reach.”

How to lower the cost of energy bills

One way to help reduce energy bills is to conduct an energy audit or install a smart meter. Bionic’s Les Roberts, a business energy comparison expert, said: “By taking part in an energy audit, you’re ensuring that you know exactly where you are using the most energy in your home and how you can cut this down.

“Similarly, installing a smart meter means you can pinpoint exactly how your home could be more energy efficient. There are no more estimated bills and no need to give your supplier a meter reading, which will save time, money and hassle.”

Additionally, depending on the energy tariff a person has, reconsidering what times of day to use gas and electricity may also help.

Mr Roberts said: “Only heating your home when you need to can be done by simply setting the timer on the thermostat to start the heating at certain times or consider a time of use tariff that offers cheaper rates at certain times.

“On this point, it may also be worth switching to a time-of-use tariff or off-peak tariff, where the price of energy will be lower at times when the grid is under less pressure and demand is lowest, which tends to be between 10pm to 8am.”

Older electrical appliances tend to be less energy efficient, so it might also be worth upgrading large appliances, such as washing machines and dishwashers if they’re more than 10 years old.

Mr Roberts concluded: “More efficient models cut the KwH used significantly, so running costs will be much lower and over time, the money spent on the appliance will be made back in savings.”

Finally, turning the thermostat down by as little as one degree can also make for sizeable savings. Mr Roberts said: “Turning down your thermostat by just one degree is a change you probably won’t even notice, especially as we move into warmer months and could reduce your heating bills by as much as 10 percent.

“Remember to also adjust your thermostat in relation to the external temperature.”