Credit, Collections & Insolvency News
New research from Citizens Advice has shown that 2.1million households are behind on their energy bills, 600,000 more than in February.
The charity’s research also reveals a quarter of all energy customers, up to seven million households, worry they won’t be able to pay their bill this winter.
According to data, the charity has obtained from large and medium energy suppliers, the size of debts is significant. The average amount owed by those who haven’t come to a repayment arrangement with their supplier is £760 for electricity and £605 for gas.
The charity’s research shows that on the whole, the support that has been put in place by suppliers to help customers is working relatively well for those who have been able to access it. 59% of people in financial difficulty who spoke to their supplier said the support options they were offered were helpful – just 16% disagreed.
As people struggle to pay their bills, customer service and being able to access support from suppliers will be more crucial than ever. The charity is urging energy suppliers to maintain customer service standards as well as continuing to provide support to their customers as we enter the coldest months of winter.
The research is released alongside Citizens Advice’s latest energy star rating – which grades energy suppliers based on their customer service. While customer service and the support for customers is holding up, the charity’s research and star rating shows some areas of concern.
People are struggling to contact their supplier, call wait times are increasing, while many suppliers make finding phone numbers difficult. These barriers may prevent people who are in financial difficulty from accessing the support available.
The charity’s research found that:
One in seven people who tried to contact their supplier said they couldn’t get through
Call waiting times for two thirds of suppliers have increased
On average, suppliers are failing to respond to a third of customer emails within two working days
The charity is urging suppliers, Ofgem and the government to maintain and expand existing support and customer service measures:
Suppliers should ensure customers can get in touch quickly and easily, including by telephone
Suppliers should continue to offer additional support agreed with BEIS through the duration of the pandemic, including payment holidays or temporary prepay credit
Government should ensure there is adequate support for the hardest hit households this winter, through fuel vouchers or extra funding to support those people not covered by existing schemes like the Covid Winter Grant
Alistair Cromwell, Acting Chief Executive of Citizens Advice, said “The government and the energy industry have put in place significant measures to support people’s incomes and help those struggling with their bills. This has made a real difference to many, but this effort will be undermined if people can’t get through to their suppliers and access that support in the first place.”
“We’re heading into the coldest months of the year and the full financial impacts of the pandemic are still to be felt. Maintaining high customer service standards is more critical than ever in order to make sure energy customers who get into difficulty can access the support they need.”
Responding to the research an Ofgem spokesperson said “We know that many people face a tough winter this year, especially those in financial hardship. We have strong protections in place for consumers, requiring suppliers to treat their customers fairly, especially the vulnerable.’
“We have strengthened protections for consumers by making it a licence requirement for suppliers to put customers in debt on a realistic and appropriate repayment plan based on their ability to pay from yesterday [December 15]. Suppliers will also have to offer emergency credit to customers struggling to top up their PPM so they do not self-disconnect.* [see below for further details]
“We expect customers to be able to easily contact their supplier across a range of channels and we do not expect to see suppliers offering poor service or only dealing with emergency situations. We closely monitor and engage with energy suppliers and will take appropriate action over poor customer service where needed.”
Commenting on the Citizens Advice report on energy customers falling into arrears Peter Earl, head of energy at comparethemarket.com, said “It is extremely rare for people to have their energy supply cut because they have fallen into arrears on payment, which should reassure energy customers concerned that this could happen during one of the coldest months of the year and less than two weeks before Christmas Day. Nonetheless, falling into arrears on bill payments can be daunting for households that are struggling financially, so it is encouraging that many people finding themselves in this situation are praising the support they received from their supplier. Our own research indicates that 29% of all households are probably not in a financial position to be able to meet the cost of higher energy bills this winter.”