The energy crisis and how to tackle large bills

The cost-of-living crisis and spiralling energy bills are dominating the news at the moment and will continue to do so for the foreseeable future.

Many of the people who contact Resolver are unsure about their rights, don’t know where to turn for help or don’t think that there is anything they can do about unaffordable bills. While there are no easy solutions, you do have a number of rights if you are struggling with the cost of energy. Don’t forget that you can use Resolver for free to contact your energy firm, make a complaint or seek help with financial difficulties.

Here is our advice on what to watch out for and how to do to get the help you need.

Energy prices, the latest news

U.K. energy regulator Ofgem said Friday 26th August 2022 that it had raised the country’s price cap by 80% to £3,549 a year, and warned that prices could get significantly worse through next year.

The price cap was introduced to limit the amount that energy providers could charge their customers. However, it’s not the maximum you could be charged – that depends on your tariff, whether you are on a prepayment meter or not and how much energy you use.

From October we will get price cap announcements every three months instead of every six. That means when the prices go up then, we will also find out what the next price cap will be in January 2023. Bills are already forecast to hit record levels next year with some predictions suggesting we could face costs of £5,000 a year or more by April.

What to do if you can’t pay?

There’s a lot of mis-information on social media and on the internet about energy and your rights. But if you are struggling, the process of getting help is relatively straightforward.

Don’t wait till it’s too late. Ask your supplier for help now if you are worried you can’t pay. Ask them about the most affordable tariffs and get them to confirm their proposals in writing – just in case you don’t get offered the best deal.

If you can’t get hold of your energy company, you can use Resolver to complain, seek help or tell them you are in financial difficulties. https://www.resolver.co.uk/

If you are already in debt then say that you are in ‘financial difficulties’. The firm should come up with a tailored plan to help you get back on your feet. You can read what businesses are supposed to do on regulator OFGEM’s website here: https://www.ofgem.gov.uk/getting-help-if-you-cant-afford-your-energy-bills

OFGEM says that you can ask for the following:

A review of your payments and debt repayments
Payment breaks or reductions
More time to pay
Access to hardship funds
Advice on how to use less energy
The option to go on the Priority Services Register – a free support service for a wide range of people struggling or who need support: https://www.ofgem.gov.uk/getting-extra-help-priority-services-register

You need to provide the business with details of your incomings and outgoings so they can assess they help you need. If they refuse to help, you can take your complaint to the Energy Ombudsman for free.

There are also a range of grants and charities who might be able to help you if you are struggling, though many will be overwhelmed in the coming months. Citizens Advice has a list here: https://www.citizensadvice.org.uk/consumer/energy/energy-supply/get-help-paying-your-bills/grants-and-benefits-to-help-you-pay-your-energy-bills/#Grants_To_Help_Pay_Energy_Debts

There’s support for people on pre-pay meters too but you have to ask for it. You may also be able to get help from some charities too.

Finally, there are a range of Government support schemes for people. We will all get £400 from October towards the cost of our bills. This is known as the Energy Bills Support Scheme: https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

Most people assumed that the money would be paid all in one go, but it has now become apparent that the payments will be made in six chunks for six months, starting in October.

There are also a range of other schemes to help people on benefits or receiving pensions or carers allowances through the cost-of-living crisis.

Finally, there is a huge amount of pressure on the Government to come up with realistic solutions to the energy crisis right now. As soon as Resolver hears about the latest proposals, we’ll update our guides and explain your rights.

Debt collection and court action

If an energy firm is threatening you with debt collectors, tell them to suspend all action while you make a formal complaint. The energy firm can call off debt collectors and suspend legal collection procedures while this happens. Get this in writing too. Inform debt collectors that you’ve made a complaint too. They should suspend their procedures and refer to the energy firm (remind them of this).

You do need to make a complaint though – the firm won’t just stop collection procedures indefinitely. So if you think your bill is wrong, make that the focus of your complaint. If you can’t afford it and they’ve refused to help you or are making things worse, then that’s a valid complaint too. You can use Resolver to write up your complaint and cut-and-paste it if the business contacts you on the phone for more information.

If you get a response from the business and you are still unhappy, then you can take your complaint to the Energy Ombudsman for free. Make it clear to the business that you expect them to take no action against you while the matter is looked in to by the ombudsman.

Don’t just stop paying your bill. Pay what you can afford and make sure the firm knows that you are doing so.

Don’t protest by not paying your bills

In recent weeks, the ‘Don’t Pay UK’ campaign has been sweeping across the internet. The campaign is asking over one million people to pledge to not pay their energy bills in October, when the new energy price cap kicks in. On their website the principle of the campaign seems to be to force the energy firms to the negotiating table to get them to dramatically reduce bills.

As campaigns go, it’s really seductive. The idea of people standing together and forcing change is appealing to many.

However, this is not like harnessing people power by going on a protest march. Refusing to pay your bill is technically a breach of contract between you and the energy company and could have a huge impact on your finances.

While it doesn’t mean that energy firms will take action, they could place charges for late payment on your account or pass you to debt collectors. If you continue to refuse to pay, they could take legal action or insist on a pre-payment meter and (very rarely) cut you off. Paying by direct debit also gets you a bit of a reduction on your bill, which you’d lose if you cancel the payment.

How do I make a complaint?

Resolver can help you make a complaint for free about anything energy related, from incorrect billing to switching errors. Get started here: https://www.resolver.co.uk/

There is a free Energy Ombudsman too if you still aren’t happy. Resolver will automatically refer you to them if your complaint isn’t sorted out.