As the cost of living crisis continues to put extreme pressure on households across the UK, new Prime Minister Liz Truss announced a price freeze on energy bills for the rest of the year.
The Prime Minister capped bills at £2,400 a year, an amount which will be frozen for two years. However, organisations such as Don’t Pay UK, the consumer strike on energy bills movement, states that the announcement doesn’t go far enough and won’t stop thousands struggling to pay.
The movement continues to gain traction, currently racking up nearly 190,000 signatures of those planning to cancel their direct debits from October, and demand a decrease in rates to an affordable level. Business experts Bionic have taken a closer look at individuals rights as a consumer.
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Here is all you need to know about the consequences of not paying your energy bills.
What can I do if I can't afford my energy bills?
Bionic content manager, Les Roberts said: "The most important step to take if you feel you cannot afford your energy bill is to contact your supplier who will be able to outline your options, such as organising a payment plan.
It is vital to discuss this with your provider first to avoid the more drastic action they are able to take."
What can your provider do if you refuse to pay your bills?
Energy suppliers do have the right to take action if people stop paying their direct debits, and rack up their debt. Les explained: "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 7 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?
Not paying your energy bills can have a negative impact on your credit score, which could make it more difficult to borrow money in the future. This can affect things such as mortgage repayments, car sales and even small loans.
Les continued: "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 still switch energy suppliers, even if I am in debt?
Les had some good and bad news when it came to this query. He explained: "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 an energy supplier cut me off if I 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 paying too much?
Les added: "Ofgem has ordered a review as the watchdog found 7 million households currently on a Standard Variable Tariff experienced a bill increase of over 60% 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."
You can visit the Bionic website here for more details on how to find better energy deals, save money and properly understand their energy bills.
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