Consumer Vulnerability Strategy: Social obligations reporting (SOR)

Monitoring forms a key part of our work to protect the interests of consumers. In Supply Licence Condition 32, energy suppliers are required to provide us with information on their performance in relation to their social obligations. This includes a variety of information relevant to their dealings with domestic customers, including information about:

  • Payment methods
  • Levels of debt and debt repayments
  • Disconnection rates
  • Prepayment meters
  • Non-financial support for consumers in vulnerable situations.

This information enables us to understand how suppliers are meeting the needs of consumers in vulnerable situations. We also use this data to check that suppliers comply with our rules, to challenge poor performance, and to inform policy. 

Most of this information is provided by suppliers on an annual basis, although some is provided quarterly.

Using the suppliers' social obligations data, we publish an annual report on vulnerable consumers in the retail energy market. This report presents a view of the extent to which vulnerable consumers are experiencing positive outcomes in the market. Our 2017 report focuses on inclusive services, affordability and debt, and staying on supply.

We also publish data on social obligations as part of our work to make the energy market as transparent as possible.

Chart

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the average amount of debt owed by domestic customers who are in arrears, but do not yet have a debt repayment arrangement set up between Q3 2012 and Q2 2017. Improvements to how we collect information about average debt mean that it is not possible to make comparisons between data provided by suppliers before and after Q3 (July-Sept) 2012.

Policy Areas:

  • Domestic consumers

Data Table

Average debt level where there is no arrangement to repay the debt (arrears)

GasElectricity
Q3 2012445440
Q4 2012433439
Q1 2013452433
Q2 2013489450
Q3 2013490466
Q4 2013466460
Q1 2014472473
Q2 2014489495
Q3 2014484503
Q4 2014481512
Q1 2015512532
Q2 2015555560
Q3 2015554573
Q4 2015536584
Q1 2016558587
Q2 2016558581
Q3 2016534568
Q4 2016510570
Q1 2017552594
Q2 2017553602

More information

At-a-glance summary

The level of debt owed by domestic customers in arrears (who do not yet have a debt repayment arrangement set up) has generally risen since we started collecting data in Q1 2012 onwards. It peaked in Q2 2017 for gas and Q2 2016 for electricity.

The increase in the average debt is at least in part due to the continuing reductions in the number of customers in debt, which is largely among customers with lower levels of debt. We will continue to monitor this closely.

Relevance and further information

There continues to be a seasonal pattern to energy debt. Debt generally falls towards the end of the year, when customers who pay quarterly are billed for the warmer months. It then rises in the spring when customers who pay quarterly fall into arrears following higher energy usage during the winter months. This seasonal trend is more pronounced with gas, most likely due to the importance of gas heating during winter.

Methodology

A customer is in arrears if they have not paid a bill for longer than 91 days/13 weeks, and there is no formal arrangement to repay the debt. It excludes any costs for subsequent consumption. This will include customers who are billed in arrears for ongoing consumption, and direct debit customers who have fallen into debt by defaulting on one or more payments. It should exclude customers who have begun the transition to a formal debt repayment arrangement, but have not yet started repaying their debt.

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Chart

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the average amount of debt owed by domestic customers who have a debt repayment arrangement set up between Q3 2012 and Q2 2017. Improvements to how we collect information about average debt mean that it is not possible to make comparisons between data provided by suppliers before and after Q3 (July-Sept) 2012.

Policy Areas:

  • Domestic consumers

Data Table

Average level of debt remaining where there is an arrangement to repay the debt

GasElectricity
Q3 2012325314
Q4 2012313304
Q1 2013334312
Q2 2013341316
Q3 2013334312
Q4 2013323306
Q1 2014346342
Q2 2014360348
Q3 2014368354
Q4 2014382355
Q1 2015375355
Q2 2015389366
Q3 2015386375
Q4 2015382384
Q1 2016388390
Q2 2016408417
Q3 2016407421
Q4 2016410427
Q1 2017415430
Q2 2017419438

More information

At-a-glance summary

There has been an increasing trend in the average level of remaining debt for domestic customers who have a debt repayment arrangement. In the last few quarters the debt for electricity and gas customers has continued to rise at a steady rate from Q2 2016 to Q2 2017, reaching £419 in gas and £438 in electricity. Q4 2015 was the first time since we started collecting data that the average level of remaining debt for electricity surpassed that for gas.

Methodology

This is a snapshot figure of the average debt that remained outstanding on the last day of the reporting period for customers repaying a debt. It only includes the outstanding amount of debt that the customer is paying as part of a repayment plan and does not include any debt incurred for consumption since the start of the repayment plan.

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Chart

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the proportion of domestic gas and electricity customers repaying a debt who are paying via a prepayment meter (PPM) between Q1 2011 and Q2 2017.

Policy Areas:

  • Domestic consumers

Data Table

The proportion of customers repaying a debt to their supplier using a prepayment meter (PPM) (%)

ElectricityGas
Q1 201141%40%
Q2 201140%36%
Q3 201140%40%
Q4 201141%46%
Q1 201236%43%
Q2 2012 32%38%
Q3 2012 35%38%
Q4 2012 37%41%
Q1 201335%37%
Q2 201334%33%
Q3 201334%35%
Q4 201335%37%
Q1 201439%40%
Q2 201439%41%
Q3 201439%43%
Q4 201440%44%
Q1 201539%43%
Q2 201539%42%
Q3 201538%41%
Q4 201539%43%
Q1 201638%41%
Q2 201639%41%
Q3 201639%42%
Q4 201640%43%
Q1 201738%42%
Q2 201739%42%

More information

At-a-glance summary

The proportion of domestic customers repaying debt who are paying via a prepayment meter has stayed broadly static in the last three years. Gas customers continue to be more likely to repay a debt via a PPM than electricity customers.

Relevance and further information

On 1 April 2017 we introduced a cap on the amount suppliers can charge a domestic PPM customer. Suppliers must set their prepayment prices at or beneath this level. PPM customers have fewer competitive tariff choices and are exposed to the risk of self-disconnection. Since the PPM cap, prices for PPM tariffs have become more competitive with other payment methods.

Methodology

When a customer falls into debt, suppliers must always offer them a range of debt repayment options – including the option to repay via a PPM – to customers. If no payment arrangement is agreed, suppliers may obtain a warrant to install a PPM to secure payment for ongoing energy use and debt repayments. This must be a last resort to avoid disconnecting the customer. A debt repayment arrangement is an arrangement to repay debts which lasts more than 91 days/13 weeks.

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Chart

Javascript is required to render chart Number of disconnections for non-payment of debt.

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the total number of domestic gas and electricity customers disconnected for non-payment of debt between Q1 2006 and Q2 2017.

Policy Areas:

  • Domestic consumers

Data Table

Number of disconnections for non-payment of debt

ElectricityGas
Q1 2006213723
Q2 2006226864
Q3 20063621,112
Q4 20064571,157
Q1 20075441,389
Q2 20075821,538
Q3 20076721,462
Q4 20078591,338
Q1 20086981,003
Q2 2008918810
Q3 2008626571
Q4 2008474280
Q1 2009698226
Q2 2009794573
Q3 2009636613
Q4 2009543382
Q1 2010443151
Q2 2010794311
Q3 2010685305
Q4 20106646
Q1 20114420
Q2 2011375146
Q3 2011419128
Q4 20118335
Q1 2012132
Q2 201213833
Q3 201219351
Q4 201210918
Q1 2013709
Q2 201316229
Q3 201326840
Q4 2013566
Q1 201400
Q2 20143112
Q3 201415929
Q4 201420
Q1 201521
Q2 20156320
Q3 201513427
Q4 201551
Q1 201611
Q2 20166831
Q3 20168820
Q4 201601
Q1 201700
Q2 2017120

More information

At-a-glance summary

There has been a long term reduction in the number of domestic customers disconnected for debt. Between Q3 2016 and Q2 2017 the number of disconnections for non-payment of debt decreased to 121 for gas and increased for electricity from 249 to 268 disconnections in the same period the previous year. There is a seasonal effect with fewer disconnections between October and March.

Relevance and further information

Disconnecting a customer’s energy supply should always be a last resort and avoided wherever possible. SLC 27 prohibits suppliers from disconnecting pensioners during winter (October to March), and requires suppliers to take all reasonable steps to avoid disconnecting premises that include any pensioners, disabled or chronically sick customers in winter. Suppliers must not disconnect anyone whose debt they have not taken all reasonable steps to recover first by using a PPM.

Members of Energy UK also adhere to a voluntary code of practice known as the ‘Safety Net’. Among other protections, signatories have committed to not disconnecting customers in vulnerable situations at any time of year and to reconnecting customers who are subsequently identified as vulnerable as a priority and usually within 24 hours. Compliance with the Safety Net is independently audited. Further information about the code can be found on Energy UK’s website.

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Chart

Javascript is required to render chart Number of accounts with a consumer repaying an energy debt.

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the number of domestic gas and electricity customers per thousand accounts who are repaying a debt to their supplier between Q1 2006 and Q2 2017. 

Policy Areas:

  • Domestic consumers

Data Table

Number of accounts with a consumer repaying an energy debt

GasElectricity
Q1 20069771,262
Q2 200611931,304
Q3 20069601,319
Q4 20067861,208
Q1 20079171,294
Q2 200710371,341
Q3 20079591,341
Q4 20077851,293
Q1 20087691,004
Q2 20088221,025
Q3 2008709980
Q4 2008646952
Q1 20098731,139
Q2 20099641,173
Q3 20099181,089
Q4 20097261,006
Q1 2010673910
Q2 2010838989
Q3 2010839953
Q4 2010711854
Q1 2011731866
Q2 2011864921
Q3 2011811870
Q4 2011691779
Q1 2012730799
Q2 2012868940
Q3 2012829930
Q4 2012802901
Q1 2013885982
Q2 20131,0021,034
Q3 20131,0121,046
Q4 20139361,017
Q1 2014837902
Q2 2014836899
Q3 2014808874
Q4 2014759840
Q1 2015716799
Q2 2015727798
Q3 2015703777
Q4 2015654745
Q1 2016654754
Q2 2016636722
Q3 2016617710
Q4 2016577681
Q1 2017567673
Q2 2017569672

More information

At-a-glance summary

This chart shows the number of domestic customers who are repaying a debt to their supplier on their gas or electricity account. This has fallen from around 5% in 2006 to around 2.5% in 2017.

Relevance and further information

The number of customer accounts repaying an energy debt has been decreasing since 2006, when nearly 5% of electricity customers and over 4.5% of gas customers were repaying a debt. There was a a peak in Q2 and Q3 2013, but the downward trend continued after this, reaching around 670,000 customers for electricity (2.4%) and 570,000 customers for gas (2.7%). The seasonal effects that were present up to 2013, whereby there was a drop in Q4/Q1 and a rise in Q2/Q3 has become almost insignificant since 2014, which is likely to be due to the reduction in the number of customers paying quarterly.

Methodology

This data reports the number of customers who have a debt repayment arrangement with their supplier on the last day of the quarter. These are customers who have entered a formal arrangement with their supplier to repay outstanding debts, including all prepayment (PPM) customers repaying a debt, and non-PPM customers on debt repayment arrangements extending beyond 91 days/13 weeks. It does not include those customers with a debit at the end of a payment scheme that will be rolled into a new payment scheme or those who have had their payments increased because previous payments were set too low. All customers on payment schemes (including direct debit) are excluded once the initial debt has been repaid.

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Chart

Source: Vulnerability report 2017.

Information correct as of: October 2017

This chart shows the total number of domestic gas and electricity customers who are in arrears, but have no debt repayment arrangement between Q3 2012 and Q2 2017. We only hold data related to debts that are being repaid for the period prior to quarter three 2012.

Policy Areas:

  • Domestic consumers

Data Table

Number of accounts in arrears where there is no arrangement to repay the debt

Gas Electricity
Q3 2012399,183464,197
Q4 2012392,384457,853
Q1 2013407,462495,902
Q2 2013446,920522,363
Q3 2013453,115520,274
Q4 2013445,163513,438
Q1 2014432,850496,390
Q2 2014472,533547,855
Q3 2014472,440567,525
Q4 2014438,342545,789
Q1 2015419,614532,988
Q2 2015434,797538,021
Q3 2015421,286518,367
Q4 2015401,141483,948
Q1 2016378,416476,224
Q2 2016402,372499,547
Q3 2016409,539525,846
Q4 2016388,287508,349
Q1 2017377,136507,734
Q2 2017412,728539,716

More information

At-a-glance summary

Customers in arrears are customers who owe a debt to their supplier, but do not yet have a debt repayment arrangement in place. The number of customers in arrears has grown slowly from when we started collecting data in 2012, to a peak in 2014 (at over 2% of electricity and gas customers). Since then it has decreased slowly, and, in Q1 2016, it reached its lowest level for gas customers since we started collecting data. In Q2 2017 1.9% of electricity customers and 1.8% of gas customers were in arrears.

Relevance and further information

There continues to be a seasonal pattern to energy debt. Debt generally falls towards the end of the year, when customers that pay quarterly are billed for the warmer months. It then rises in the spring when customers that pay quarterly fall into arrears following higher energy usage during the winter months.

Suppliers are required to offer domestic customers struggling to pay their electricity and/or gas bills a range of payment options:

  • Payment by regular instalments through means other than a PPM (for example, direct debit)
  • Payment by direct deductions from social security benefits received by the customer (such as Fuel Direct or Universal Credit)
  • Payment through a PPM, where this is safe and reasonably practical.

Suppliers need to focus on preventing debt as much as they do on managing and recovering debt. Providing accurate, clear and regular bills and making early contact with customers can prevent customers accumulating debt. Suppliers have an obligation at this stage to provide energy efficiency information to customers in financial difficulties.

Methodology

These are accounts that have had a bill issued which remains unpaid for longer than 91 days/13 weeks where a formal arrangement to repay the debt has not been agreed. 

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Through the publications and update feed below you can also access our publications and outputs produced in relation to suppliers’ social obligations.

Publications and updates

  • Published: 16th Oct 2017
  • Reports and plans
  • 6 Associated documents
This report represents a view of the extent to which vulnerable consumers are experiencing positive outcomes in the retail energy market.

  • Published: 30th Sep 2016
  • Reports and plans
  • 7 Associated documents
The report summarises domestic suppliers’ performance in 2015 on debt, disconnection, prepayment meters and services for consumers in vulnerable situations.

  • Published: 12th Aug 2016
  • Guidance
  • 1 Associated documents
These directions from the Gas and Electricity Markets Authority formally issue revised “Guidance on monitoring suppliers' performance in relation to domestic customers”.

  • Published: 8th Sep 2015
  • Reports and plans
  • 6 Associated documents
The report summarises domestic suppliers’ performance in 2014 on debt, disconnection, prepayment meters and services for consumers in vulnerable situations.

  • Published: 12th May 2015
  • Guidance
  • 1 Associated documents
These directions formally issue revised “Guidance on monitoring suppliers' performance in relation to domestic customers”.

  • Published: 18th Dec 2014
  • Charts and data, Reports and plans
  • 6 Associated documents
The report provides a summary of domestic suppliers’ performance in 2013 in relation to debt, disconnection, prepayment meters (PPMs) and services for customers in vulnerable situations.

  • Published: 30th May 2014
  • Charts and data
  • 3 Associated documents
During Q1 and Q2 2013 we have seen increases in a number of indicators, including the number of accounts in debt, the average level of debt and a number of PPM accounts with a customer repaying debt. These increases in part reflect expected seasonal...

  • Published: 30th Jan 2014
  • Charts and data
  • 1 Associated documents
Monitoring and reporting form a key part of our work to protect the interests of consumers. As part of their licence conditions, energy suppliers are required to provide us with information on their performance in relation to their social obligations.

  • Published: 13th Nov 2013
  • Reports and plans
  • 6 Associated documents
This report provides a summary of domestic suppliers’ performance in 2012 in relation to debt, disconnection, Prepayment Meters (PPMs) and services for customers in vulnerable positions. The key findings are:

  • Published: 10th Dec 2012
  • Reports and plans
  • 3 Associated documents
This report summarises domestic energy suppliers' performance for Quarters 1 and 2 2012 in the areas of debt, debt management and disconnection.

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