Energy supplier debt

Falling into debt is never a good feeling, but there is help out there to get you out of it. Thousands of UK consumers struggle to pay energy bills, so you’re not alone. Here’s what to do with energy supplier debt.

Person worried about debt looking at bills

Last updated: 23 October 2020

In this guide you’ll find:

  • What should I do if I’m in debt with gas and electric suppliers?

  • What should I do if I’m in debt because my bill’s too high

  • What happens if I don’t pay an electric bill and move out?

  • How can I owe money on a prepayment meter?

  • Can I change my energy supplier if I’m in debt?

  • Can my energy supplier stop me switching?

  • Can my energy supplier cut me off because I’m in debt?

  • How to turn debt around

  • How to lower bills when you’re in debt

  • More help with energy debt

What should I do if I’m in debt with gas and electric suppliers?

Get in touch with your energy supplier as soon as you realise that you can’t afford to pay your gas or electricity bill. If you don’t pay that first bill, the unpaid balance will be transferred to the next one. Addressing debt with gas and electricity suppliers at the start will prevent problems from spiralling out of control. You can work together to create a payment plan before more serious measures are taken – up to and including your energy supplier cutting you off. 

What should I do if I’m in debt because my bill’s too high?

If a large bill has pushed you over the edge into debt with your gas and electric, be sure to check the following.

Is the bill for the correct meter? Check that the ID on your meter tallies with the one on your bill.
When was the last time your meter was read? Estimated readings could be inaccurate.
Is the meter reading correct? If it has been read, was the figure taken down accurately?
Have your previous meter readings been accurate? Did you receive a bill before that seemed low – it could be because the meter reading was wrong.

Most high bills are due to unpaid debt accumulating over time, but if there’s a sudden, unexpected change in your meter reading, it could be because there’s a fault with your meter. This could also be the cause if you receive a bill that seems alarmingly high. Another possibility could be an inaccurate estimate. Whatever the cause, it’s worth phoning your supplier for assistance to find out why you have unexpectedly high readings and bills. If your supplier thinks it could be a faulty meter, it will send an engineer to check. 

What happens if I don’t pay an electric bill and move out?

You can’t just move house and leave your unpaid debt behind. When the new occupant moves in, they’ll take a meter reading and send it to the supplier which will close your account. You will then be billed for any outstanding amount, for which you are still liable. 

How can I owe money on a prepayment meter?

As the name suggests, you pay for your energy in advance with a prepayment meter, so how is it possible to owe money? 

A prepayment meter is a common solution to energy supplier debt. If you move to a prepayment meter because of debt, the amount you owe is transferred to the meter when it’s installed. This allows you to pay off your older debt at the same time that you’re paying for your current gas and electricity service. You can clear debt from your meter in small amounts over time to prevent you from falling further behind. 

Prepayment meters are topped up with a token, key, smartcard or mobile app. This puts you in control of how much you’re spending on gas and electricity. During months when you have a little extra money or where your energy use is lower, you can clear the debt on your electric or gas meter and eventually build up some credit. This sets up good habits for the future, as well as paying off the debt. 

Checking debt on a gas or electric meter

Your gas or electricity meter will tell you if money is owed and how much debt remains. This information is accessed a different way on different meters, so it’s best to check your supplier’s website to find out how to check what you owe. 

Can I change my energy supplier if I’m in debt?

You won’t necessarily be locked into a contract with your current supplier just because you’re in debt. However, this will depend on how long the debt has gone unpaid. You can switch energy providers if your debt is less than 28 days old. The outstanding balance will simply be added to your final bill. 

This serves as a great incentive to find a cheaper energy plan, reducing the chances that you’ll fall into debt down the road. It’s important to note, however, that you’re still legally obligated to pay off any debt to your old supplier before you switch. 

Can my energy supplier stop me switching?

Yes. If your debts are more than 28-days old, you can’t usually switch supplier until the money is repaid. Unless the arrears are due to billing errors or inaccurate estimates, your energy supplier can stop you from switching energy supplier while you’re in debt. 

Can you switch energy suppliers if you’re in debt on a prepayment plan? 

Yes. The rules for switching suppliers are different with prepayment meters. As long as you owe your current supplier less than £500 for gas or £500 for electricity, you can change your energy provider while you’re in debt. You’ll need to ask the new supplier to transfer this debt over to your new account as part of the switch. 

Can my energy supplier cut me off because I’m in debt?

It’s possible, but they only tend to do it as a last resort. Energy suppliers usually follow other debt collection procedures first, including installing prepayment meters or offering repayment plans. If these measures don’t work, then your gas or electricity meter could be disconnected leaving you cut off. 

Disconnection law

The law governing the disconnection of gas and electricity means that your supplier must send you a written disconnection notice at least seven days before it cuts you off. Legally, this notice can’t be sent until at least 28 days have passed since the unpaid bill was issued. These measures are designed to give you plenty of time to prepare for your meters to be disconnected. 

The disconnection law also prevents the supplier from disconnecting your supply in certain circumstances. Additional legal protections are in place for vulnerable consumers like pensioners or those with long-term health problems – especially if they have been placed on the supplier’s Priority Services Register

If it’s winter, your supply won’t be disconnected if you’re old enough to qualify for a state pension and you

  • live alone

  • live only with other pensioners

  • live only with young people, aged under 18

 Those who are disabled or chronically ill also have legal safeguards to prevent their supply from being cut off during the colder months. 

How to turn debt around

While it’s tempting to hide those unpaid bills and ignore the problem, taking prompt action can help turn debt around. A good first course of action is to switch to a cheaper energy plan if possible because that will make it easier to pay your bills in the long run. If you’re paying less each month for your energy, you can put any savings towards older unpaid debts. 

If your debts are older than 28 days and you can no longer switch, follow these steps. 

  1. Contact your energy supplier. You can write or call the customer service centre to explain your situation and find out what your options are. 

  2. The energy supplier will provide you with details of what you currently owe, along with information to avoid getting into further debt. 

  3. Together, you can work out a repayment plan that’s realistic for your circumstances. Although the supplier is not required by law to consider your financial situation, it’s in everyone’s best interests for the debt to be repaid. 

  4. Ask for a plan that spaces debt repayments out over time, rather than in unmanageable lump sums. This will be easier to stick to and won’t tip you over the edge into further debt. Repayments usually cover a portion of your current use as well as a portion of the debt.

  5. If the repayment plan is unworkable, renegotiate for a more affordable option. 

  6. Consider having a prepayment meter installed to help with debt management. You’ll have greater control over spending, and repayments can be spaced out over a longer time. Be aware that prepayment tariffs (also referred to as pas-as-you-go or PAYG plans) can be more expensive than standard tariffs. 

Fuel Direct scheme 

If you receive certain benefits or a state pension, you may be eligible for Fuel Direct. This is a government-run scheme that helps you to clear your energy debt by deducting small, regular amounts directly from your state-paid income and sending them to your energy provider. This will help you to avoid slipping further into debt or becoming a victim of fuel poverty. 

You must receive one of the following to be eligible for the Fuel Direct scheme: 

  • Pension Credit

  • Income-based Jobseeker’s Allowance

  • Income Support

  • Universal Credit (if you’re unemployed)

  • Income-related Employment and Support Allowance 

At the time of writing in September 2020, the cost is £3.70 per week for most people or 5% for those on Universal Credit. You can find out more by contacting your local Job Centre or Pension Centre

How to lower bills when you’re in debt

There are additional options that are worth looking into to potentially lower your bills, particularly if you receive income-based Jobseeker’s Allowance, Universal Credit, Pension Credit or Income Support. These include Cold Weather Payments, Warm Home Discount and the Winter Fuel Payment. Apart from this, you can look for everyday ways to use less gas and electricity, like: 

  • Turning appliances off at the wall, rather than leaving them on standby. 

  • Upgrading your home’s insulation and draught-proofing measures. 

  • Only running appliances like dishwashers and washing machines when full. 

  • Switching to energy-saving lightbulbs. 

  • Turning your home’s thermostat down by one degree. 

The little things add up if you’re in debt with gas and electric suppliers and need to lower bills.

More help with energy debt

The following organisations can also offer advice about being in debt with your gas and electricity:

  • Citizens Advice: 08454 04 05 06

  • Energy Supply Ombudsman: 0330 440 1624

  • National Debtline: 0808 808 4000