Given the essential nature of energy, using our remit to lower bills for consumers is one of our key objectives as a regulator. Our work complements government’s wider work on affordability and fuel poverty. We do this through regulating companies that consumers interact with directly, for example by putting in place price protections, rules around debt management and monitoring compliance with the delivery of schemes such as the Warm Home Discount and the Energy Company Obligation.
Consumers on low incomes and those in other vulnerable situations often feel the impact of high energy bills the most. Being unable to afford an acceptable level of thermal comfort may have serious health and psychological consequences.
We have put in place price protections for consumers on standard and prepayment tariffs. Price caps ensure consumers who prepay or who are on poor value ‘default’ energy deals pay a fairer price for their energy, and are protected from being overcharged.
Find out more information on price caps.
We require suppliers to offer certain options and services for customers who are in payment difficulties, and to take all reasonable steps to ascertain the customer’s ability to pay when agreeing the duration and value of a repayment plan, whether through direct debit or a prepayment meter. Accompanying this are the ‘Ability to Pay’ principles which we expect suppliers to adhere to when engaging with customers in payment difficulties.
In October 2020, we published our decision to incorporate and update the Ability to Pay principles in the supply licence conditions, which will give the principles further prominence and emphasise consumer protection for customers who are in potential and actual financial difficulty.
The principles are:
- Having appropriate credit management policies and guidelines
- Making proactive contact with customers
- Understanding individual customers’ ability to pay
- Setting repayment rates based on ability to pay
- Ensuring the customer understands the arrangement
- Monitoring arrangements after they have been set up
- Re-engaging with the customer after an initial occurrence of a failed repayment arrangement (new principle consulted on).
Disconnection due to debt should only be considered as a very last resort by suppliers. It is now extremely rare that anyone is disconnected from their energy supply because they are in debt.
Energy companies must not disconnect a domestic customer who has not paid their bills unless they have first taken all reasonable steps to recover those charges. Suppliers are also prohibited by their licence from knowingly disconnecting during winter consumers that are of a pensionable age, or solely live with people that are of a pensionable age or under 18. Additionally, they must take all reasonable steps during winter to avoid disconnecting those that are disabled or chronically sick.
Energy UK’s Commission for Customers in Vulnerable Circumstances sets out plans to build on the “Safety Net”, a pledge by a number of suppliers to never knowingly disconnect a vulnerable customer at any time of the year.
Find more information about consumer advice on Energy supply disconnection and prepayment meter rules.
Find more information about our work on supporting Prepayment meter customers
A backbill is a ‘catch-up’ bill sent to you by your gas or electricity supplier when you haven’t been correctly charged for your energy use. Such bills can leave customers in debt.
Backbilling protections for domestic customers have been in effect since May 2018. These protections mean a supplier can’t seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued.
For more details, see Energy Backbilling project.
Alternative branding is where the supplier’s customer correspondence is branded with a name that is not the energy suppliers (e.g. on the letter head), implying that it comes from a different organisation. This can mislead a customer, in an attempt to draw their attention to the money owed.
In 2014, we investigated the use of alternative branding by suppliers. It gave our expectations for suppliers’ communications– that they should be transparent and comply with our ability to pay principles. We want companies to meet and exceed the standards expected of them by their own customers and the public more generally.
We collect and publish data on affordability as part of our work to make the energy market as transparent as possible.
Through the publications and update feed below you can access our publications and outputs produced in relation to supporting customers who are struggling with their bills.