Martin Lewis warns ‘people will die’ as energy prices go up
Ofgem announced the energy price cap will rise a further 30 percent as of October, bringing average annual household energy bills to a staggering £3,549. While the price cap is expected to be reviewed again in a short three months, this price is expected to top £5,000, adding additional and significant pressure to households across the country. However, simply boycotting bills may do a lot more harm than good, experts have said.
If the movement reaches one million signatures, Don’t Pay UK activists pledge to strike on October 1 by cancelling their direct debits to energy providers, given the Government doesn’t reduce the price cap to an “affordable level” before that time.
Don’t Pay is calling for the price cap to be reversed to its April 2021 level of £1,138, for energy companies to end enforcement of pre-payment meters – which can see consumers paying much more with this option, and for the introduction of an emergency social tariff to support the vulnerable this winter.
So far, the movement has topped 117,000 signatures, and this figure is only increasing by the minute.
However, charities have been warning of the “serious” repercussions that can come from withholding direct debit payments to providers, including impacted credit scores and energy supply cuts.
Price cap rise: Can your energy provider cut you off if you don’t pay?
The energy bill price cap has been raised to £3,549
But what exactly are consumers’ rights and what could legally happen if people don’t pay? Here are some of the key questions answered.
What can a provider do if someone refuses to pay?
An energy provider does have the right to take action if someone stops paying their direct debit and begins to rack up debt.
Business comparison site Bionic’s Les Roberts said: “They could potentially move you on to a prepayment meter, which means you would most likely be paying a higher rate. A prepayment meter requires you to pay for energy as you use it.”
However, people do have some rights as a consumer before this happens.
Mr Roberts continued: “Your supplier has to give you at least 28 days to repay your debt before they take action. They cannot enter your home and install a prepayment meter without at least seven days prior warning.
“Your supplier should offer you a repayment plan or help you to arrange repayment through your state benefits before they install a prepayment meter.
“You can also refuse a prepayment meter if you are unable to physically reach your meter or top up the balance at a shop. For example, if you are disabled or ill or live very remotely.”
However, if all the above conditions are met and the person still refuses to pay, the supplier does have the right to gain a warrant to enter their home and install the meter, according to Mr Roberts.
Can refusing to pay affect the person in the future?
Not paying energy bills can have a significantly negative impact on credit scores, which could make it harder to borrow money in the future.
Mr Roberts explained: “Although you pay for your energy as you use it (this is the case for both domestic prepayment and credit meters), credit reference agencies can be notified for non-payment of utility bills.
“Your supplier could pass your account onto a debt recovery service, and you may even be hit with a County Court Judgement (CCJ).
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“Even if you then repay the debt, a record of a CCJ will stay on your credit file for six years and can make it harder to borrow money.”
Can I switch energy providers if I’m in debt?
As prices skyrocket, people may decide to shop around for the best deal using a comparison website. However, it’s important to be aware of any outstanding debt and how it might impact a switch.
Mr Roberts said: “If you have been in debt with your current provider for more than 28 days, your switch might be blocked. But your supplier can’t stop you from switching if it’s their fault you’re in debt.
“If you have a prepayment meter, you can switch if you’re in debt, so long as the amount you owe is £500 or less per fuel. In this instance, the supplier you switch to will take on the debt and you will repay them instead.”
There are options available for people in energy debt. British Gas’ Individual and Families Fund is open to anyone with an energy debt between £250 and £750, and those who apply don’t need to be a British Gas customer.
Can an energy provider cut a person off if they refuse to pay?
If a repayment plan can’t be agreed with a supplier and the person refuses to have a prepayment meter installed, then the supplier can begin steps to disconnect the supply, according to Mr Roberts.
He said a supplier can disconnect the supply in the following circumstances:
- If a person hasn’t come to a repayment agreement and refuses to have a prepayment meter installed without a valid reason (for example, an illness or disability stops you from accessing, reading, or using the meter).
- If a person does arrange a repayment plan but misses an instalment, the supplier can start action that could lead to disconnection after 28 working days from the date the payment was missed.
- If a person hasn’t paid after 28 days from the date of the bill, the supplier can start putting the wheels in motion to disconnect the supply.
Mr Roberts said: “Disconnection can only be considered when all other options have been exhausted and both gas and electricity suppliers must give you seven days’ notice before they do it.
“Ofgem has stated that suppliers should do everything in their power to avoid disconnecting your supply, especially if you are ill or disabled.”
However, he notes: “They are not allowed to disconnect the supply of a person who is above the state pension age or lives alone between the colder months of October to April.”
Am I actually paying too much?
Ofgem has ordered a review as the watchdog found seven million households currently on a Standard Variable Tariff experienced a bill increase of over 60 percent between February and April this year.
The regulator found the firms Ecotricity, Good Energy, Green Energy UK, TruEnergy and Utilita Energy were potentially calculating bills inconsistently.
Mr Roberts said: “If your supplier is one of these companies, you should contact them about a possible rebate. Remember the best action to take is to compare different suppliers for the best deal using a comparison service.”