It feels like each day brings worse news about energy bills and the cost of living crisis.
On Thursday, I took part in the Daily Mirror latest Facebook Live event with journalist Sam Baker on the shocking rise of our gas and electricity bills.
It was clear from readers’ comments that everyone is deeply concerned about the terrifying size of the bill predictions - and that few people can realistically afford them.
There are no easy solutions.
But rest assured my fellow consumer rights campaigners and I are fighting hard to get us all some practical, realistic solutions to the unaffordable bills that are being proposed.
In the meantime, here’s my advice on what to watch out for and how to do to get the help you need.
What’s the latest news about energy prices?
Regulator Ofgem is due to announce the latest price cap on energy prices on August 26.
The price cap was introduced to limit the amount that energy providers could charge their customers.
However, it’s not the maximum you could be charged – that depends on your tariff, whether you are on a prepayment meter or not and how much energy you use.
The last time the price cap was raised, it went up 54% to £1,971 for the average bill.
This time round, predictions are hovering around £3,582 to £3,634 a year.
Whatever the actual price cap, we can assume that the energy firms will all charge the maximum in October.
From October we will get price cap announcements every three months.
That means when the prices go up then, we will also find out what the next price cap will be in January.
Bills are already forecast to hit record levels next year with some predictions suggesting we could face costs of £5,000 a year or more by April.
How on earth is anyone going to pay that?
Let me start by saying this. It’s clear that payments of this size are unaffordable for the majority of households in the UK.
That means the solution to this problem isn’t scrimping and saving. It’s tough political and industry decisions and action that needs to be taken now.
I’ve recently been hearing that people are putting their existing debts on to credit cards, or are taking out loans to cover the bills.
Again, this is not an acceptable alternative to the situation and is much more expensive in the long run.
If you are considering borrowing to pay the bills – stop. You need immediate financial help and support.
But what can I do if I can’t pay?
There’s a lot of mis-information out there on social media and on the internet about energy and your rights.
But if you are struggling, the process is quite straightforward. Don’t wait till it’s too late.
Ask your supplier for help now if you are worried you can’t pay.
Ask them about the most affordable tariffs and get them to confirm their proposals in writing – just in case you don’t get offered the best deal.
If you are already in debt then say that you are in financial difficulties. The firm should come up with a tailored plan to help you get back on your feet.
You can read what businesses are supposed to do on the Ofgem website.
Ofgem says that you can ask for the following:
- A review of your payments and debt repayments
- Payment breaks or reductions
- More time to pay
- Access to hardship funds
- Advice on how to use less energy
- The option to go on the Priority Services Register – a free support service for a wide range of people struggling or who need support
You need to provide the business with details of your incomings and outgoings so they can assess they help you need.
If they refuse to help, you can take your complaint to the Energy Ombudsman for free.
There are also a range of grants and charities who might be able to help you if you are struggling, though many will be overwhelmed in the coming months. Citizens Advice has a list here.
There’s support for people on pre-pay meters too but you have to ask for it. You may also be able to get help from some charities too.
Finally, there are a range of Government support schemes for people.
We will all get £400 from October towards the cost of our bills. This is known as the Energy Bills Support Scheme.
Most people (myself included) assumed that the money would be paid all in one go, but it has now become apparent that the payments will be made in six chunks for six months, starting in October.
What if I’m threatened with debt collectors?
If you’re being threatened with debt collectors, tell them and the energy firm to suspend all action while you make a formal complaint.
The energy firm can call off debt collectors and suspend legal collection procedures while this happens. Get this in writing too.
You do need to make a complaint though – the firm won’t just stop collection procedures indefinitely.
So if you think your bill is wrong, make that the focus of your complaint.
If you can’t afford it and they’ve refused to help you or are making things worse, then that’s a valid complaint too.
If you get a response from the business and you are still unhappy, then you can take your complaint to the Energy Ombudsman for free.
Make it clear to the business that you expect them to take no action against you while the matter is looked in to by the ombudsman.
Don’t just stop paying your bill. Pay what you can afford and make sure the firm knows that you are doing so.
Don’t protest by not paying your bills
In recent weeks, the Don’t Pay UK campaign has been sweeping across the internet.
In a nutshell, the campaign is asking over one million people to pledge to not pay their energy bills in October, when the new energy price cap kicks in.
On their website the principle of the campaign seems to be to force the energy firms to the negotiating table to get them to dramatically reduce bills.
As campaigns go, it’s really seductive. The idea of people standing together and forcing change is appealing to many.
My fellow television presenter and top legal expert Gary Rycroft told me: "Unlike harnessing people power by going on a protest march, refusing to pay your bill is technically a breach of contract between you and the energy company and could have a huge impact on your finances."
Gary and I have often raised concerns over the years about these kinds of campaigns. I have to agree.
While it doesn’t mean that energy firms will take action, they could indeed place charges for late payment on your account or pass you to debt collectors.
If you continue to refuse to pay, they could take legal action or insist on a pre-payment meter and (very rarely) cut you off.
Paying by direct debit also gets you a bit of a reduction on your bill, which you’d lose if you cancel the payment.
Despite some groups having the best intentions, people tend to focus on the messages they want to believe in.
I’ve recently been told by a number of people on social media that businesses can’t legally force you to pay bills if enough people refuse. This is, of course, incorrect.
Here are my challenges to the energy firms
Ultimately the Government needs to take the lead to tackle this problem. But I’d like the energy firms to commit to three simple promises, to help us all get through the coming months.
- Suspend all debt collection and court action activity for at least a year and agree realistic payment plans for those who can’t afford their bills.
- Agree a definition of financial difficulties and the options available to all people who fall in to this category so people are treated consistently.
- Suspend paying dividends to shareholders during the cost of living crisis unless all people in need are supported.
Agreeing to these three small commitments would go some way towards taking the fear away from millions of people during the most challenging times we’ve faced in over a generation.
Oh, and if no progress is made in the coming weeks, write to your MP and ask them to speak up on your behalf.
- Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.
