What happens if I can’t pay my energy bills?

What to do if I can’t pay my energy bills?

If you have fallen behind with your payments and are struggling to pay bills, acting quickly will help to minimise your debt and get the situation sorted. The sooner you get in touch with your energy company, the sooner you can start working out a plan to pay your energy bills and get your finances back on track.

If you feel like you’re struggling to pay your energy bills, the first thing you should do is get in touch with your energy supplier. Your supplier is required to work with you to come to a solution. This solution could involve creating a repayment plan or even having a prepayment meter installed in your home. Your energy company should try to find an option that works for both of you and that doesn’t put any unnecessary pressure on your finances.

If you don’t get in touch with your energy supplier, and continue to fall further behind in your energy payments, you may find your gas or electricity supply is disconnected.

Energy supplier payment plans

If you agree to a payment plan with your supplier, they’ll create a timetable to help you repay your debt while continuing with your monthly energy payments. You’ll probably be asked to pay monthly instalments as part of your payment plan.
These instalments should be affordable for you and should allow you to repay your debt without further financial difficulty. They’ll be a fixed amount and will cover the amount you owe and your current energy usage.
When creating a payment plan, your supplier has to take a number of factors into account.

The two most important are:

• How much you can afford to pay.
• How much energy you’ll use in future.

The more information you give your supplier, the easier it will be for them to create an affordable payment plan. Information you’ll need to provide your supplier will include details about:

• Your income
• Your outgoings
• Your debts
• Your personal circumstances
• Your energy usage

Your supplier will use your previous energy usage in order to estimate your future consumption. It’s a good idea to provide them with up to date meter readings in order to make this estimate as accurate as possible.
There are three main types of repayment method energy companies use to help their customers pay off their debt:

• The Fuel Direct Scheme
• A prepayment meter
• Grants

The Fuel Direct scheme

The Fuel Direct scheme will take money for your energy payments directly from your state benefits. This can help you to better budget your monthly income and pay off your debt efficiently. You should be eligible for the Fuel Direct scheme if you’re on Universal Credit, Jobseeker’s Allowance and a number of other state benefits.

Prepayment meters

A prepayment meter is a type preventive method in accordance with energy supply disconnection law and its often installed in homes where the customer is struggling to stay on top of their energy payments. If you have a prepayment meter, you’ll be asked to pay for your gas or electricity in advance. You’ll also be asked to pay a little extra towards clearing your energy debt.
Prepayment meters can be a good way of getting on top of your finances. However, prepayment tariffs are generally more expensive than other options so you may find you end up paying more for your energy overall. Prepayment meters can also be a little inconvenient as they require you to top up your credit before using your energy.

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Energy grants

All of the big six energy companies (British Gas, E.On, Scottish Power, EDF Energy, RWE npower and SSE) have set up charitable funds that provide grants to some customers to help them pay their fuel bills. If your energy is supplied by one of these providers, get in touch to find out if you can apply for a grant.

Will my energy be disconnected if I can’t pay my energy bills?

If you can’t pay your energy bills and don’t get in touch with your energy supplier, you may well find that your gas or electricity supply is cut off. In general, energy suppliers try to avoid this eventuality. Most will send out a number of warning letters to alert you that you’re falling into debt. They’re also required to notify you before going to court to get a warrant to disconnect your supply.

Although dealing with these letters can feel a little overwhelming, the sooner you address the issue, the easier it will be to resolve. Energy companies are well used to dealing with customers at risk of energy disconnection that have fallen behind in their payments and will know just what to do to help get you back on track.

Benefits and schemes to help with energy bills

There are a number of schemes set up to help households manage their energy bills. Most of these are specifically designed to help customers get through the winter as this is when households use the majority of their fuel.
Applying for one of these schemes could help to reduce your winter fuel bill and make it easier to stay on top of your finances.

Warm Home Discount

The Warm Home Discount gives eligible customers a lump sum off of their winter fuel bill. In 2020/2021, that amount is £140. All large energy companies are required to be part of the scheme and a lot of smaller ones have signed up to.
The Warm Home Discount is aimed at people in two main groups. The first is known as the ‘core group’ and is made up of retirees who receive the Guarantee Credit element of the Pension Credit scheme. These customers will generally be people over 65 on low incomes.
If you don’t fall into that group, you may form part of the ‘broader group’. This group is made up of people on a variety of means-tested benefits. Every energy supplier has their own criteria, so you’ll need to check with your energy company to see if you qualify.
If you think you're eligible for the Warm Home Discount but your current supplier isn’t part of the scheme, it may well be worth switching to an energy company that is.

Cold Weather Payments

Cold Weather Payments are given to qualifying households when the temperature falls below 0˚C for seven days in a row. You’ll receive £25 each time the temperature dips for a full week, something that can make a big difference to your cold weather fuel bill.

Winter Fuel Payment

The Winter Fuel Payment scheme is aimed at people aged 66 and over. It’s a tax-free lump sum that’s paid out between November and December and it can go a long way to helping you pay your winter fuel bills.
If you’re aged 66 or over and live alone, you’ll get £200 towards your winter fuel bill. If you live with another person who qualifies, you’ll get £100. If you’re over 80, you’ll receive £300.
If you receive the state pension, you should get this money automatically. If you don’t, call the Winter Fuel Payment Centre on 0800 731 0160.

What if you're struggling with bills because of the coronavirus lockdown?

During the Covid-19 pandemic, energy companies are giving customers extra leeway when it comes to paying bills. Although you may still be cut off eventually if you don’t pay your bill or top up your prepayment meter, most energy companies will work hard to make sure that doesn’t happen.
If you’ve been made unemployed because of the pandemic, or if your income has been reduced, it’s a good idea to get in touch with your energy supplier to let them know. They should be able to create a payment plan to help you cope and to ensure you don’t fall into further debt because of the crises.

Would you like to know more information about energy management? Great! Check out some of these related articles.

• What Happens if my energy supplier goes bust?
• What to do if you experience an erroneous transfer.

FAQ

Can I get Fuel Direct?

Fuel Direct is aimed at people claiming certain benefits. It allows fuel payments to be taken directly from your benefits before they’re paid to you. These benefits are:

• Universal Credit
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Income Support
• Pension Credit

If you claim one of these benefits, you may well be eligible for the Fuel Direct scheme.

Who to contact if it's difficult paying energy bills?

If you’re struggling to pay your energy bills, you need to get in touch with your supplier as soon as possible. They’ll be able to help you get on top of your energy payments and help to ensure your supply isn’t cut off.

What if I’m in energy debt?

If you’re in debt to your energy supplier, you’ll need to work with them to create a payment plan to repay your debt and get back on track. If you fail to stick to your payment plan, or don’t contact your supplier to let them know you’re struggling, you may find that your gas or electricity supply is cut off.

What is a prepayment meter?

A prepayment meter is a type of energy meter that requires you to pay for your energy before you use it. They’re often used by energy companies to help customers repay debts and to ensure they don’t fall back into energy debt once they’re in the clear. However, prepayment tariffs are generally more expensive than standard deals and these types of meters can also be inconvenient. Make sure a prepayment meter is the right option for your household before having one installed.