Ofgem launches consultation for more help for prepayment customers and those struggling to pay their bills

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Ofgem is consulting on plans to standardise and strengthen support for prepayment customers and for all customers who are struggling to pay their energy bills.

In March this year, suppliers voluntarily agreed to support vulnerable customers through COVID-19, including those on prepayment meters facing difficulties in topping up while self-isolating or in financial distress.

Ofgem is now proceeding with proposals to make stronger protections for prepayment meter customers, who are more likely to be in vulnerable circumstances, into a permanent licence requirement.

Jonathan Brearley, Chief Executive of Ofgem, commented on the consultation: “I want to thank suppliers for their efforts during this crisis in keeping essential energy supplies flowing to customers, particularly those in vulnerable situations.

“These permanent protections will reduce the number of prepayment customers temporarily going without energy because they cannot afford to top up.

“It is always best for customers to keep up with their energy bills if they can.

“But at this time when many may face financial hardship, these proposals mean those who are struggling to keep up are assured of some breathing space.”

Under these proposals, suppliers would have to offer emergency and friendly hours credit (for example, when top-up points are closed) to all prepayment customers, plus offer additional credit for consumers in vulnerable circumstances to provide extra breathing space while working out alternative arrangements to pay.

These would include customers who temporarily cannot afford to top up or get to their local shop to top up because of a mobility issue or due to self-isolation.

Ofgem has been concerned about increasing numbers of prepayment customers who go without energy or “self-disconnect” after running out of credit on their meter since before COVID-19, and consulted on initial proposals last year.

Many suppliers already provided extra support, typically £5-£20 credit per fuel at a time, but this was inconsistent across the industry.

Ofgem is also proposing to strengthen protections so  that suppliers provide extra support to help customers struggling to pay their energy bills from this winter.

This includes setting repayment rates based on a customer’s ability to pay and monitoring these arrangements.

Many suppliers already offer this support, but making it a formal licence requirement will ensure more customers are helped.