Ofgem Introducing New Rules to Help Vulnerable Customers with Energy Costs.

Energy regulator Ofgem is introducing new rules from 15 December to help vulnerable customers who struggle to pay their energy bills this winter.

Suppliers will be required to offer emergency credit to customers who cannot top up prepayment meters.  And if customers are in debt, suppliers must put them on “realistic and sustainable” repayment plans.  In March, suppliers voluntarily agreed with the government to support people affected by the pandemic.  Now Ofgem has updated its licence rules to formally require suppliers to help customers in financial difficulty.  The industry watchdog said those in financial distress would get some breathing space, but ultimately all customers will need to pay for the energy they use.

This follows Ofgem cutting the price cap on default tariffs and prepayment meters, due to falling gas wholesale prices, which means cheaper energy bills for millions of people this winter.  “Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations,” said Ofgem’s director of retail Philippa Pickford.  “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.”

Ofgem wants to reduce the number of prepayment customers who run out of credit and end up being without energy.  The regulator also wants to make sure that suppliers have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on their ability to pay.  In September, Citizens Advice estimated that 6 million people in the UK have fallen behind on paying at least one household bill during the pandemic, and that many more are on the cusp of being unable to afford to make ends meet.

(Source:  BBC Website, October 2020)

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