For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Are you worried about your energy debt in 2023? We know how you feel, and we’re here to help. Each month, over 170,000 people visit our website for guidance on solving their debt problems.
In this easy-to-understand guide, we’ll cover:
- The average energy costs in the UK.
- What happens if you can’t pay your gas or electric bill.
- How to get help with your energy bills.
- Your rights if an energy company tries to cut you off.
- How to clear your energy debt.
We know that having energy arrears or not being able to pay your next gas and electric bills can be very worrying, which is why we’ve written this guide to help you understand your options, including ways to get help with your bills and how to deal with debt collectors.
Our team has offered guidance to many people in your situation, so we understand how hard it can be. We’re here to help you make the best decisions about your energy debt.
Let’s tackle your energy debt together.
What are the average energy costs in the UK?
What happens if I don’t pay my gas or electricity bills?
If you don’t pay your gas or electricity bill, you’ll create an energy debt which may also be known as energy bill arrears.
What is energy debt?
An energy debt is a debt owed to an energy supplier for an unpaid gas or electricity bill – possibly both. As soon as you fall behind on a payment, you’ll have created an energy debt that needs to be dealt with.
Energy debts are considered priority debts, which means you should deal with these debts before you try to pay off non-priority debts, such as personal loans and credit cards.
Energy Companies
The MoneyNerd team has written about the different UK energy companies and people’s experiences of having energy debt with them. Learn more about your energy company here.
Can I get help paying my energy bills?
If you’re struggling to pay your energy bills or have started to accumulate energy debt, you can usually get help by speaking to your energy company. Many energy suppliers offer a repayment plan to help you get on top of your energy debt in a way that’s affordable to you.
You could ask for a smart metre as well. These metres allow you to keep track of how much energy you’re using per day and might help identify appliances that you use which aren’t energy efficient.
On top of help directly from the energy company, you can also get energy bill help by speaking to charities or your local authority, and by taking advantage of the most recent schemes when applicable. We’ve discussed some of the new schemes below.
Energy bills support scheme
All UK households will receive £400 off their energy bills provided they have a domestic electricity or gas supply to their home. This scheme is designed to cover rising energy costs during the winter of 2022 and 2023. The non-repayable discount will be applied to energy bills directly and won’t require an application.
Winter fuel payment
The winter fuel payment is a government scheme designed to help older people cover energy costs during winter. You could get between £250 and £500 to help pay your winter energy bills if you were born on or before the 25th of September 1956. A winter fuel payment of £600 is available to some people.
Energy price guarantee
The energy price guarantee has been implemented to cap the amount you can be charged for one unit of gas or electricity. This was done to mitigate rising energy costs. However, the scheme is now under review as the government investigates the best way to help households deal with rising energy costs.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
Can an energy company cut you off?
If an energy bill remains unpaid for 28 days, the energy company can write to tell you they may are considering disconnecting your energy supply. To do this they would need to apply to the court and attend a hearing. They would also need to provide notice of the disconnection.
However, this is extremely rare and some people can never have their energy cut off, such as people with disabilities, pensioners and people with young children.
If you have gas and electricity arrears, it’s much more likely that the energy company will install a prepayment metre into the property.
What happens if my supplier fits a prepayment metre?
A gas or electricity company can install a prepayment metre in your property if you haven’t paid off your energy debt within 28 days.
If they plan on installing an electric prepayment metre, they have to write to you to give seven working days’ notice before coming to install it. If they plan on installing a gas prepayment metre, they have to give you seven days’ notice (not working days!) before coming out to install it.
However, if you are in the middle of a dispute with the energy company, such as disagreeing about owing the money, they cannot install any prepayment metres until the dispute is resolved.
» TAKE ACTION NOW: Fill out the short debt form
Can you get into debt with a prepayment metre?
A prepayment metre requires you to pay for your energy in advance. But it’s not completely impossible to increase your debt using a prepayment metre, although it’s unlikely.
When an energy company instals a prepayment metre in your home, they are allowed to charge you an installation fee. This fee could be added to your existing energy debt. The good news is that most energy companies don’t charge an installation fee.
What can I do if I can’t pay my energy bill?
If you simply cannot afford to pay your energy bill while repaying other essential living costs, you should consider:
- Speaking with the energy company to work out an affordable repayment plan
- Discussing the option to pay energy debts through benefit payments if you receive them
- Speaking with a debt charity to consider other options, including debt solutions like a Debt Management Plan or a Debt Relief Order.
What happens if I can’t keep to the plan?
If you cannot keep to a repayment plan or a debt solution, you should communicate with the energy company or the charity that set up your debt solution to try and renegotiate monthly payments. Do this as soon as possible.
What will happen if I ignore my energy debt?
The energy company can take further action If you don’t make any effort to pay your energy bill arrears. The energy company will have to follow a debt recovery process when you don’t pay.
#1: Chasing you for payment
As soon as you miss an energy payment the company will remind you to pay. However, they cannot take any further action until at least 28 days have passed since you missed the payment.
It’s best to try and deal with the debt in these initial weeks to avoid escalation. This involves getting free debt advice from a charity, which you can learn more about via our debt information hub.
As mentioned above, after 28 days the energy supplier could try to disconnect your supply, but it’s more likely that they will install a prepayment metre.
#2: Debt collection agencies
The energy debt might then be passed on to a debt collection agency to try and get you to pay. The debt collection business works on behalf of the energy supplier to track you down (if required) and then request payments. Reasonable fees and interest might be added to your energy debt.
#3: Potential court order
If you haven’t agreed on a payment plan with the debt collection agency, they may make legal threats. The energy company could apply for a court order to make you pay. When you’re subject to a court order, you must pay the money in whatever way possible or be instructed to do so – or face further consequences.
#4: Debt enforcement action
When the money owed isn’t paid after a court order, the energy company can ask the court for permission to enforce the debt with further action. This might involve a warrant to use bailiffs, who will come to your home to ask for payment and potentially repossess your goods to then be sold.
Can I cancel my direct debit payment?
The Don’t Pay UK campaign is a movement of people who are declaring that they simply won’t pay their electricity or gas bill due to rising costs. They demand change at the government level.
Technically, you could cancel your direct debit if you cannot afford your energy bill, but this might not be a good idea.
First of all, it’s much better to negotiate cheaper repayments with the energy company if possible or enter into a suitable debt solution. Secondly, paying by direct debit usually provides you with a discount on the energy bill, which you’ll lose if you cancel.
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Can I leave the energy supplier if I’m in debt?
You can only switch energy suppliers if you haven’t paid a bill that was issued within the last 28 days. If you missed a bill payment and 28 days have passed, you cannot switch energy companies.
Can an energy supplier stop you switching?
Yes, energy companies can stop you from switching if you haven’t paid their bill that was issued more than 28 days ago.
Can I have my energy debt wiped off?
You’re allowed to ask an energy company to write off your debt due to financial difficulty, but the company isn’t obligated to do so. The best way to write off energy debt is to successfully use a debt solution like a Debt Relief Order.
It’s possible for an energy debt to become too old to be collected after so many years. Read on!
How long can energy companies chase you for debt?
Energy companies need to recover the debt from you within five years in Scotland or six years in the rest of the UK.
If you make any payment towards the debt or acknowledge that you owe the debt, the countdown resets. However, energy companies have infinite time to recover the money owed if a court order has already been issued.
How to clear debt on electric metres?
Contact the company to inform them that you’re the new occupier and not responsible for the debt. More information can be found here!
My energy company has collapsed. What should I do?
When your energy company goes out of business you won’t need to take action or cancel your direct debit unless told to do so. A new company will take over and should maintain your previous agreement.
