What happens if I don’t pay my electric bill?

Are you worried about what will happen if you can’t pay your electric bill? You’re not alone. Each month, more than 170,000 people come to us for advice on their debt troubles.

Citizens Advice reports a record number of people seeking help for energy debts, with almost eight million borrowing money to pay their energy bills in the first half of 2023.¹ It can be scary when you can’t pay for your energy, but we’re here to help with lots of useful tips.

In this guide, we’ll explain:

• What happens if you can’t pay your electric bill in the UK.
• How to set up a repayment plan with your supplier.
• If you can cut some of your debt amount.
• Whether you can be forced to use a prepayment meter.
• How unpaid bills can affect your credit score.

We’ll also give advice on how to reduce your energy costs and where to find help if you’re struggling with too much debt. Remember, difficult times happen to us all, and you’re not alone in this. We’re here to help you find the best way forward.

Let’s dive in.

So, what happens if I don’t pay my electric bill?   

So, what happens if you don’t pay your electric bill? The cost of your weekly shop continues to rise, transport, services and utilities are getting ever more exorbitant. Ofgem recently announced that the government’s energy price cap will rise by a record 54% in April. 

If you needed confirmation of this soaring inflation, it comes in the form of those pesky bills that drop through your letterbox.

The ever-increasing cost of living is leaving many of us struggling to keep up with payments. This can lead to missed payments. To answer the question, ‘what happens if I don’t pay my electric bill?’, there are several options open to your energy supplier.

So, what are the consequences of not paying utility bills? Well, the energy company could take one of the following steps, depending on your specific circumstances:

• They could pass your details to a debt collection agency
• They could seek a warrant to install a smart meter and prepayment meter
• If you have a smart meter, they could remotely switch this to prepayment

If you are in debt with your energy supplier and they take any of these options, this can also lead to you incurring additional charges such as administrative costs or the debt collection agency’s costs. Your credit rating can also be affected if the energy company takes any of these actions against you.

The most important step for you to take is to contact your electricity supplier at the earliest possible opportunity. Your supplier is obliged to try and come to a suitable arrangement with you. Initially, this should come in the form of a structured repayment plan. However, if you fail to keep up with this, your supplier could instigate further action.

Let’s take a look into the actions your electricity supplier could take.

Remember, as everyone’s personal situation will differ, it is important only to make decisions that relate directly to your own specific situation. In this guide, I have provided you with an overview of what happens if you don’t pay your electric bill, however, it is important to seek professional advice that is relevant to your situation before making any important decisions about your energy debt.

Can you be cut off from electricity?

This is an option that energy companies generally only take as a final option after all others have been explored. Therefore, if you are struggling to pay your electric bills and are worrying about disconnection, it is important to address your energy company debt and don’t just ignore it hoping that it will go away!

It is encouraging to note that disconnections for debt in the UK fell to almost zero last year.

Disputing your Electric Bill

While recently it can be confusing to know if your electric bill is correct, thanks to the energy price increase, it’s always important to check if your bill is incorrect if it doesn’t look right.

You can do this by getting in touch with your energy supplier and asking them to confirm the charges on your bill. Mistakes happen, and charges might have been added to your bill by accident. Asking the question may save you from paying for something you don’t actually owe.

Can I be forced to have a prepayment meter?

Electricity suppliers are supposed to offer repayment plans as a first option. However, should you fail to keep up with the payments they are likely to suggest a smart meter and prepayment meter. If you refuse this and still fail to keep up with payments, your supplier can apply for a warrant to have one installed.

Ofgem’s website informs us that, ‘Suppliers installed 84,000 prepayment meters under warrant to recover customers’ debt last year’. However, it is important to note that certain suppliers, ‘forcibly installed a much higher proportion of meters per head for their newly indebted customers than the industry average’.

Ofgem has expressed concern about how these companies have not been providing sufficient support to help customers pay their debt back. If you believe this to be the case, seek professional advice. Citizens Advice is a good place to start.

It is important to note that you can legitimately object to having a prepayment meter installed. This particularly applies to the elderly and those with an illness or disability that would make it difficult to access, read or use the meter.

Check out our guide to Prepayment Meter Debt.

» TAKE ACTION NOW: Fill out the short debt form

How far back can electricity companies charge?

Electricity companies are only allowed to charge for any electricity that you have used in the last 12 months and must follow energy supplier debt collection practices. If you have been billed for a full year’s electricity, you can ask your supplier to structure a repayment plan allowing you to pay the amount back over an extended period.

However, if you provided incorrect meter readings or didn’t notify your energy supplier in a change of circumstances, the company can backdate further than 12 months.

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Do unpaid utility bills affect credit?

According to the consumer credit reporting company Experian, your credit rating will only be affected ‘if you miss enough payments that the provider sends your debt to a collection agency or charges off your account, assuming you’re not going to pay it.’

This is because electricity bills are generally not included in consumer credit reports as they’re not considered credit accounts. Therefore, your credit rating will only suffer if your debts are passed to a third party.

Help with Paying Your Electricity Bill

The cost of living has risen exponentially over the past 12 months, with energy bills becoming totally unaffordable for many families and households in the UK. Luckily there are some government schemes that can help you make your electric bill a bit more affordable:

• Warm Home Discount Scheme
• Winter Fuel Payment
• Cold Weather Payment

These are only some of the energy debt solutions out there, if you want to learn more about other potential ways out of your situation, please take a look at the table below.

I’d highly recommend looking into each of these to check out the eligibility, especially if you’re on a low income and receiving means-tested benefits or have young children in your home.

References

1. Citizens Advice – Record numbers seek help for energy debt before winter even hits