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.
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.