How to Switch Energy Suppliers if in Debt

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Can you still switch energy suppliers to get a better deal, even if you owe money? The short answer is generally yes, but it depends. If you’re currently in debt to your energy supplier and struggling to keep up with payments, switching might we’ll be your best option to get your energy finances back on track. All you have to do is ask your new supplier to transfer this debt over to your new account. This will be done as part of the switching process, so you don’t have to do any differently.It’s also the case that you can switch energy suppliers if it’s your supplier’s fault you’re in debt. This can happen for a number of reasons, for example, if they misread your meter or sent you an incorrect bill. However, there may be some time scale limitations to making the switch. In this article, we will explain what you need to do if you are in debt and would like to switch energy suppliers.

Last update: June 2022

As you may have heard on the news, the UK energy market is currently under an immense amount of stress as a result of a global gas shortage driving up costs and putting several energy suppliers out of business. To learn more about this and stay updated on a daily basis you can read our page on the UK energy crisis.

If you owe your current supplier less than £500 for gas or £500 for electricity, you can switch your energy provider even if you’re in debt. In these cases your supplier can’t stop you from switching even if you’ve been in debt longer than 28 days. So, the bottom line is that even if you are in debt to your energy provider, don’t panic. There are systems in place to help you get out of debt and switching might be the first thing you need to do.

What to do if you are in energy debt?

Switching energy suppliers is perhaps the easiest way to save a large amount of money on your energy bill. In fact, in some cases, it could cut hundreds of pounds off of your annual energy bill. However, what happens if you are in debt to your supplier due to unpaid bills or a change in personal circumstances?
The first thing you do if you realise you are in debt is to get in touch with your energy supplier. As soon as you can’t afford to pay your gas or electricity bill you should reach out, as this could help prevent the situation getting any worse.

Hiding from debt is never the right answer. If you don’t pay the first bill, the unpaid balance will simply be transferred to the next. Confronting your debt with suppliers early on will often prevent problems from getting out of control. It is usually possible to work together to create a payment plan to cut the debt in a controlled way before more serious measures are put in place. This could include your energy supplier cutting you off and leaving you without power.

Most unpaid bills and debts accumulate over time. However, if there’s a sudden, change in your meter reading, there could be a fault with your meter. This could also be the case if you receive a bill that seems alarmingly high. You should contact your supplier to check if this is a concern.

An inaccurate estimate could be another reason for an unusually high bill. Whatever it is, phone your supplier to find out why you have unexpectedly high bills or if you are going to have trouble paying. If it is a faulty meter or inaccurate reading, the debt problem could be over before it even starts, and they will send an engineer to check and repair any issues.

Can I owe money on a prepayment meter?

As the name ‘prepayment’ suggests, this is a way of paying for your energy in advance. So how is it possible to owe money if you pay in this way? Basically, while you can’t accrue debt on a prepayment meter, a prepayment meter is a common solution to energy supplier debt, so debts can be attached.

If you switch to a prepayment meter in order to pay off your debt, the amount you owe is transferred to the meter at the point it’s installed. As you top up your current gas and electricity services you can also be paying off small amounts of your debt each time. Prepayment meters don’t allow you to get into further debt so they are a good way of controlling spending and clearing debt over a manageable period, without falling further behind.

Prepayment meters work by topping up with a token, key, smartcard or through the mobile app. This gives you much greater control over how much you’re spending on your power. At times when you have less money or when your power demands are higher, such as winter, you can focus on paying for energy. If there are times when you have more disposable cash or when your energy consumption is lower, you can use this opportunity to clear the debt on your meter. This ideally creates good habits for the future, as well as paying off the debt.

What happens to my balance if I switch suppliers?

If you are in debt but decide that switching may help you to save, any balance on your account will be added to the final bill your previous supplier sends you. If you are not able to pay this bill in one go, talk to your old energy supplier about arranging a payment plan. There is more information about how to do this below.

Can my energy supplier stop me from switching?

If you are in a large amount of debt with your supplier, an energy supplier might try to stop you from switching, even though you’re entitled to. It all depends how long you have been in debt. If you’ve been in arrears for 28 days or less, there is nothing your supplier can do to stop you from changing providers. The same is true if it’s their fault you’re in debt (as outlined above).
However, if you have been in debt for more than 28 days, you will generally be required to repay any balance before you can switch. Of course, once your debt is cleared, you’ll be free to shop around and switch to any provider you like.
If your provider tries to stop you from switching before 28 days, you can make a complaint to the regulator.
If you need some help to find the right supplier for your energy needs, give us a call to find out more on0330 818 6225.

How do you switch energy supplier when you’re in debt?

As always, you should start by looking around for a cheaper energy deal or one that offers you energy in a more affordable and suitable way. If you find a tariff that better suits your finances, you can use a third-party site to change suppliers or get in touch with your new supplier directly. We can help you to find a supplier that suits your requirements and one that could save you several hundred pounds each year.

Can I pay debt straight from my benefits?

If you get Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance or Pension Credit, then it is possible to pay your debts directly from your benefit payments.

This is often a cheaper and easier way of repaying debts than using a prepayment meter scheme. Plus, it means that you won’t run out of gas or electricity. The scheme for doing this is called Fuel Direct and you can find out more about this and other energy discounts below.

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The Fuel Direct scheme

If you receive one of the following, you may be eligible for the Fuel Direct scheme:

  1. Pension Credit
  2. Income-based Jobseeker’s Allowance
  3. Income Support
  4. Universal Credit (if you’re unemployed)
  5. Income-related Employment and Support Allowance

Fuel Direct is a government scheme that aims to help you clear energy debt. It works by deducting small, regular amounts directly from your benefits and sends it to your energy provider. The goal is to help you to avoid sliding further into debt or being cut off for non-payment of bills.

Warm Home Discount

The Warm Home Discount is a government scheme created to remove some of the financial pressures on people most at risk of fuel poverty. The discount comes in the form of a rebate, paid out between October and March. This is the time of year when energy usage is at its highest and the costs most difficult to bear.

If you would like to know more about the Warm Home Discount, call the helpline on 0800 731 0214 from 8.30am to 4.30pm on Monday to Friday.

Deductions from your benefit payments

There is another way to pay using the benefit system. Some people arrange to pay off energy debts through small weekly deductions from their payments. These are known as third party deductions.

Grants and benefits to help you pay your gas and electricity bills

As well as the Fuel Direct scheme and Warm Home Discount, you can also get:

Winter Fuel Payments

This is an annual one-off payment to help you afford your heating bills during the winter months. To qualify for a Winter Fuel Payment, you need to have been born on or before 5 October 1954.

Cold Weather Payments

These are one-off payments to help with extra heating costs during very cold spells. Payments are given each time the temperature drops below a specific temperature over a set period of time.

To be eligible you need to qualify for:

  1. Pension Credit
  2. Income Support
  3. Income-based Jobseeker’s Allowance
  4. Income-related Employment and Support Allowance
  5. Universal Credit

What is the Priority Services Register?

The Priority Services Register (PSR) helps suppliers identify customers who need priority support in emergency situations. You can register for this free service to get extra help if you’re without your gas supply in an emergency. Your supplier can then provide you with electric heating, cooking appliances or even alternative accommodation until normal service can be resumed.

Disconnection of your energy supply

Disconnection of service due to debt tends to be the last resort of energy suppliers. They usually follow other debt collection procedures first. This generally includes installing prepayment meters or devising repayment plans. However, if these measures are not successful, then they are legally entitled to disconnect your meter leaving you without power.

switch energy suppliers if in debt

What is the disconnection law?

The law governing disconnection of gas and electricity says that suppliers must send a written disconnection notice. This must be at least seven days before the power is disconnected. Legally, it cannot be sent until at least 28 days have passed since the date of issue of the last unpaid bill. This is to give you time to prepare for disconnection.

The law also prevents the supplier from disconnecting your supply in specific circumstances. Further legal protections exist for vulnerable consumers. This includes pensioners or those with long-term health problems. If the person in question is on the Priority Services Register then they are unlikely to be cut off and other solutions found.

If you qualify for a state pension your supply won’t be disconnected during the winter months. This also applies if you are of a pensionable age and:

  1. Live alone
  2. Live only with other pensioners
  3. Live only with young people, aged under 18

Customers who are disabled or chronically ill also have legal safeguards in place, especially during colder months.

What kind of payment plan will my supplier offer me?

Taking timely action with your supplier can help turn debt around in most cases. Hiding from the debt is never the right answer. First, try to switch to a cheaper energy plan if possible. This will make it easier to pay bills in the long run. You can put any savings towards paying unpaid debts.

However, if your debts are older than 28 days and you can no longer switch then you need to try the following course of action.

  • Contact your energy supplier to explain your situation and find out what your options are
  • The supplier will provide details of currently debts, along with information on how to avoid building up further debt
  • Create a repayment plan with your supplier that’s realistic. The supplier is not legally required to consider your financial situation but it’s in their interest to recover the debt and they will usually be open to helping in any way they can
  • Space out debt repayments out over time, rather than lump sums. This is easier to stick to and won’t lead to further debt
  • If the repayment plan is unworkable, you might want to consider having a prepayment meter installed to help with debt management. This gives greater control over spending and repayments can be spaced out over a longer period

How can my energy supplier help me pay my gas and electricity bill?

As mentioned above, your supplier has no legal requirement to consider your circumstance but in most cases will be open to helping in any way they can. After all, it’s in their interests to recover the debt.

Usually they will agree to a payment plan with you, allowing you to pay off your debts in instalments or as part of a payment plan. This generally means paying fixed amounts over a set period, within the limits of what you can afford.

The supplier will take into account how much you can afford to pay, based on details of your income and outgoings. They will also consider other debts and personal circumstances and your future energy use. You may be required to give more regular meter readings for more accurate billing.

Where can I get advice to help me with energy debt?

You can get advice about being in debt with your energy provider from the following organisations:

  1. Citizens Advice by calling 08454 04 05 06
  2. Energy Supply Ombudsman by calling 0330 440 1624
  3. National Debtline by calling 0808 808 4000

Would you like to know more about switching energy suppliers? Great! Check out these related articles:

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FAQ

What should I do if I am in energy debt?

Get in touch with your energy supplier as soon as you can’t afford to pay your gas or electricity bill. This could help prevent the situation from getting any worse.

Can my supply be disconnected?

Disconnection is usually a last resort only used when all other avenues of debt settlement have been exhausted. But your supplier does have the right to disconnect your meter as long as you do not meet certain criteria.

Are there grants and benefits to help pay your gas and electricity bills?

Yes, these include the Warm Home Discount, Cold Weather Payments and Winter Fuel payments. However, you will need to meet the criteria to qualify.

How can my energy supplier help me pay my gas and electricity bill?

While your supplier has no legal requirement to consider your financial circumstances they will be open to helping in any way they can. After all, it is in their interests to recover the debt. This generally involves creating an affordable repayment plan.

Updated on 22 Jun, 2022

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