The energy price cap will be rising by 80 per cent in October, Ofgem have announced.
This will mean the average energy bill will jump to £3,549 - that equals to £295.75 each month. Martin Lewis has warned this will be 'catastrophic' to thousands of households with many expected to fall into fuel poverty if further help is not provided.
In protest of the rising costs, the campaign group Don't Pay UK are racking up support with calls for people to not pay their energy bills on October 1.
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Don't Pay UK explain: "Mass non-payment is not a new idea, it happened in the UK in the late 80s and 90s, when more than 17 million people refused to pay the Poll Tax – helping bring down the government and reversing its harshest measures.
"Even if a fraction of those of us who are paying by direct debit stop our payments, it will be enough to put energy companies in serious trouble, and they know this. We want to bring them to the table and force them to end this crisis."
However, financial and legal experts have warned people against not paying their bills. They have warned of implications that could follow if people don't pay their bills. Those who choose to take part in the boycott could face legal consequences as they are breaching their contract and the energy provider is then in their legal right to take action.
However, as money saving expert Martin Lewis urges the Government to act, business comparison experts Bionic have taken a closer look at your rights as a consumer if you choose to stop paying your energy bills. Les Roberts, Content Manager at Bionic has provided the below guidance.
What can your provider do if you refuse to pay?
Your energy provider does have the right to take action if you stop paying your direct debit and begin to rack up debt. 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, you do have some rights as a consumer before this happens. 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.
Do note that if all the above conditions are met and you still refuse to pay, your supplier does have the right to gain a warrant to enter your home and install the meter or they could change your smart meter setting to a pay-as-you-go set up.
Can refusing to pay affect me in the future?
You also need to be aware that not paying your energy bills can have a negative impact on your credit score, which could make it harder to borrow money in the future.
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). 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 you may decide to shop around for the best deal, using a comparison website. It is important to be aware that 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.
Can your energy provider cut you off if you refuse to pay?
If you can’t agree a repayment plan with your supplier and refuse to have a prepayment meter installed, then your supplier can begin steps to disconnect your supply.
Your supplier can disconnect your supply in the following circumstances:
If you haven’t come to a repayment agreement and refuse 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 you do arrange a repayment plan but miss an instalment, your supplier can start action that could lead to disconnection after 28 working days from the date you missed the payment.
If you haven’t paid after 28 days from the date of your bill, your supplier can start putting the wheels in motion to disconnect your supply.
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 and 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 per cent between February and April this year.
The regulator found that the firms Ecotricity, Good Energy, Green Energy UK, TruEnergy and Utilita Energy were potentially calculating bills inconsistently. 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.
How do you feel about the rising cost of energy? Let us know in the comments.
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