How to switch energy supplier if you're in debt

The end of 2020 saw over 2 million UK households in arrears with energy companies. This number is only set to rise as households face a further struggle with increasing winter energy bills.

If you're one of those falling behind on making gas and electricity payments then you will find yourself accruing a debt with your energy supplier. If not dealt with this could lead to added costs on top of the debt, and in the worst case scenario, your energy supply may be cut off.

If you're failing to pay your energy bills there are a number of steps you can take to avoid any disruption with your supply, and to help you repay what you owe.

Key Takeaways

  • If your energy debt is less than 28 days old, you can switch suppliers, with the debt added to your final bill. For debts older than 28 days, you must repay before switching.
  • For those with prepayment meters and debt under £500 for gas and electricity, it's possible to switch suppliers and pay off the debt via the new meter.
  • Communicating with your energy supplier is crucial; they can offer repayment plans, payment breaks, or advice on reducing future debts.

How much debt are you in?

The first step is to address whether you are in debt with your supplier and work out how much you currently owe. The next step is understanding whether you can switch energy tariff, or supplier, to a cheaper deal. You don't need to be in credit to switch energy supplier, however there are different regulations based on the amount of debt you have and the type of tariff, or meter, you currently use as to whether you can switch immediately or not.

If your debt is recent and has been on your account for less than 28 days, you'll be able to switch supplier with any remaining amount owed added to your final bill. However, if the debt is older than 28 days you will need to repay this first before you can look to move to a new provider.

If you're in debt and have a prepayment meter, the rules are slightly different. If you owe less than £500 for gas and £500 for electricity then you'll be able to switch to a new supplier whilst paying off any outstanding debt through your prepayment meter. If you owe more than £500 then again you will need to pay your debt before switching.

Are you on a prepayment meter?

If you are finding it increasingly difficult to keep up with your energy bill payments you may be advised to switch to a prepayment meter if you're not already using one. These meters work by paying in advance and topping up the credit via a card, key or app. This way of purchasing energy means you won't be able to build up any energy debt.

Long term, prepayment meters won't help you save on new energy bills. These types of meters aren't as cost effective as other meters as prepayment tariffs are usually more expensive than standard energy tariffs. Another downside is you can be left without gas and electricity if you fail to top up your meter.

Talk to your energy supplier

Whether you have existing debt or have recently acquired it, speak to your energy supplier to discuss your concerns. They can provide both support, and solutions, based on your circumstances, including: putting together debt repayment plans that are affordable, granting payment breaks, or increasing the time you need to pay back by.

They can also discuss options for avoiding debt in the future, offering help with budgeting and ways to reduce gas and electricity usage.

Other ways to reduce gas and electricity bills

You can reduce your debt quicker by being smarter with your energy use. There are several avenues to consider such as:

  • Shop around as soon as possible for a better energy tariff or supplier. Use our energy comparison service.
  • Change your energy payment method for your bills so you know exactly when it will come out either monthly or quarterly.
  • Consider what appliances may be using the most energy.
  • Check whether you're eligible for grants or benefits to save on heating and insulation such as the Green Homes Grant.
  • Check whether you're eligible for any government schemes such as Energy Company Obligation (ECO) scheme.

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