Rising energy prices are expected to push the number of people who are in debt to their supplier up sharply, but many aren’t aware that they may be entitled to help.

According to comparison website Uswitch.com, more than three million households entered this winter in energy debt, a rise of 500,000 compared to this time last year. Energy arrears amounted to £510m in 2021, up £77m compared to 2020.

The increase comes as UK households have been warned of a “very difficult winter” by the government, as gas prices and inflation continue to rise. Find out more about the current situation in our article The energy bills crisis: what can you do about soaring costs?

Here, we explain what to do if you are in debt to your energy supplier, and what help may be available to you.

What should you do if you owe money to your energy provider?

If you are in debt to your electricity or gas provider and can see no way of paying the money you owe off, get in touch with them as soon as you can. Remember that suppliers are used to dealing with people in similar situations, particularly during the current energy crisis.

You should find your energy supplier is understanding if you have been financially impacted by Covid-19, the increasing cost of living, or if your financial circumstances have changed so you need more time to pay.

Here are some of the steps you should take if you owe money to your energy supplier.

1. Contact your energy supplier

Tell your supplier that you want to work out a way you can reasonably repay your debt. This could mean being moved onto a specific repayment plan, paying extra every month or being moved to a prepayment meter.

Make sure you let your supplier know about your personal circumstances, such as if you’re elderly and live alone, have a disability or a long-term illness, or claim benefits.

2. Tell your supplier if you need more time to pay

Your energy supplier must give you advice on how to pay back the money you owe and should suggest a repayment plan that will still leave you enough money to live on.

According to some debt advice charities, some energy companies put pressure on their customers to pay off debts within a few months even if that’s sooner than they can afford to. However, energy companies are supposed to give customers a reasonable amount of time to pay off their debts.

If you feel you’re being put under too much pressure contact Citizens Advice or a debt advice charity such as Stepchange. They will be able to provide you with advice on how best to proceed.

The majority of households pay their energy bills by direct debit. However, if you pay on receipt of your bill, remember that energy bills are supposed to be paid within 28 days of the date printed at the top of the bill.

What are the options for paying off your debt?

If you owe money to your energy company you should be given different options for paying it off, including:

1. A debt repayment plan

Your supplier isn’t obliged to offer you a repayment plan, but chances are, it will do so, as remember it wants you to repay the debt even if it takes some time. Energy suppliers have been required by energy regulator Ofgem to offer customers debt repayment plans or emergency credit if they are using prepayment meters.

This may involve paying your current bill in installments, along with some of your arrears spread over a number of weeks, or months. It’s important that you try to stick to any plan you’ve negotiated with your supplier because if you don’t they may be less sympathetic if you get into debt in the future.

If you owe money to your supplier and you’re on a debt repayment plan you don’t have the right to switch to another supplier. The only time when your supplier can’t prevent you from moving to a different company is if the debt is due to a mistake they’ve made, such as reading your meter incorrectly or linking your account to the wrong meter number, for example.

If you’re on a repayment plan, but struggling to meet payments, speak to your supplier to see what can be done to make them more affordable.

2. A prepayment meter

Your energy supplier may suggest that you move to a prepayment meter. This way, you pay in advance for the gas or electricity that you use, so that you don’t fall further into debt, and you also pay back some of what you owe.

However, your supplier must not force you onto a prepayment meter as a first option. If you want to go onto a prepayment meter you can ask for one, but you shouldn’t be put under pressure to go onto one just because you’re in debt. It should be the last resort before disconnecting you.

You prepay for your energy with a smartcard, or key that you can top up and use as needed. The amount you’re charged for your energy will reflect how quickly you’re paying back your debt. Be aware that – even without paying back the money you owe – prepayment meters are an expensive way of buying energy.

3. Fuel Direct: paying your debt using benefits

If you’re in debt to your supplier and on particular benefits, such as Universal Credit, Pension Credit or Jobseeker’s Allowance, you may be able to gradually pay off your bills from your benefit payments. This scheme is known as Fuel Direct, and if you’re entitled to use it, a set amount will be deducted from your benefit payments each month and paid to your supplier. This money will be put towards paying off any debt, alongside covering the cost of your day-to-day energy use.

Generally, the Fuel Direct scheme is only available as a last resort through Jobcentre Plus, or the Pension Service, depending on the benefits you receive, if you have no other way to pay off your debt. You can find out more about this scheme at Gov.uk.

What happens if you owe money to an energy supplier that’s gone into administration?

Many providers have ceased trading over recent months, as they have faced increasing financial pressures amid wholesale price rises that cannot be passed onto consumers because of the energy price cap.

If your supplier goes into administration while you are in debt, you don’t need to do anything. You will still have to pay what you owe back, but wait for your new supplier to contact you. Either your new supplier will take on your debt, or refer you to an administrator that needs to be paid in the event of a company going bust.

Could your supplier disconnect you?

Don’t worry that a missed energy bill will be followed by disconnection – it won’t.

You may be told by your energy provider that your gas and electricity supply could be disconnected if you haven’t paid a debt after 28 days of being notified. However, usually your supplier will offer a variety of options to repay your debt, rather than disconnect you, such as a repayment plan or prepayment meter.

If you’re a pensioner living alone, or a pensioner living with children under five, you cannot be disconnected between 1 October and 31 March, even if you’re in debt and unable to repay it.

You also cannot be disconnected at any time by any of the six largest suppliers (EDF, British Gas, npower, E.on, Scottish Power and SSE) if you have one of the following: long-term health problems, serious financial problems, a disability or young children at home. Smaller suppliers may also have similar criteria that means you will not be disconnected while in energy arrears.

Prepayment meters

If you’ve got a prepayment meter and don’t top it up, your energy supply may stop. You can ask your supplier for emergency credit if you can’t afford to top up the meter when you run out, and to reduce the amount you are repaying each week if you are in debt.

What happens if you are disconnected?

If you are disconnected by your supplier, it’s usually a last resort as you have failed to come to an agreement and been in persistent debt. In this scenario, your supplier can enter your home and manually disconnect your supply, after sending a notice stating they are applying to court for a warrant. You must be given seven days notice in writing before your supplier enters your property.

However, if you use a smart meter, it’s possible that your supplier can disconnect you without having a warrant to access your property.

Remember, though, that you shouldn’t panic about being disconnected if you fall behind with your energy bills. Your supplier is far more likely to offer a range of solutions than disconnect your supply.

If you’ve been disconnected or threatened with disconnection but think you shouldn’t have been, contact your supplier and tell them. If you get nowhere, make a formal complaint and contact the Citizens Advice consumer helpline on 0808 223 1133.

Can I get help with my heating costs?

If you’re struggling to afford your energy bills and worried about heating your home this winter, check whether you are entitled to any financial assistance from the government.

There are various schemes available. For example, if you were born on or before 26 September 1955, you may be entitled to a tax-free Winter Fuel payment of between £100 and £300 to help pay your heating bills. The amount you receive depends on your age and who else you live with.

You may be eligible, for example, if you receive the Guarantee Credit element of pension Credit or certain means-tested benefits, and your electricity supplier is part of the Warm Homes Discount scheme. Find out more about help you might be able to claim in our guide Are you eligible for help with heating costs?

Making your home as energy efficient as possible is another way to reduce your bills. You can find out more in our article Energy saving tips: how to reduce bills.

Are you worried about affording your energy bills, or do you owe money to your supplier? You can join the money conversation on the Rest Less Community forum, or leave a comment below.

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