Energy disconnections at record low

Watchdog warning over energy bills

A "large number" of consumers are in significant debt to their energy provider but disconnections have fallen to an all-time low, according to an Ofgem report.

Some 1.3 million electricity accounts and 1.1 million gas accounts - or 5% - were in debt last year, but the number of customers who have agreed repayment plans has risen, according to the regulator's annual Social Obligations Report.
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The number of disconnections by suppliers fell across Great Britain to 557 last year, with half as many electricity disconnections and two thirds fewer gas disconnections taking place than in 2011.

Ofgem said suppliers were responding to its requirements to take customers' ability to pay into account when agreeing repayment plans, and to disconnect only as a last resort.

The average repayment deals agreed last year allowed customers twice as long to clear their debt as those agreed in 2010, while 35% of customers repaying a debt were paying less than £3 a week.

Ofgem's senior partner for sustainable development Sarah Harrison said: "Energy bills are rising and household budgets are very tight. It is more important than ever before that energy suppliers do all they can to help customers who are struggling to manage bills and are in debt.

"Ofgem's regulations put obligations on suppliers and provide protection for consumers and today's report shows how suppliers are responding to these requirements.

"Levels of disconnection are at an all-time low and suppliers are working to help customers in debt. But that is not enough. Suppliers must continue to reach out to consumers and promote free consumer services and help that is available to manage energy bills, working even more closely with debt and consumer advice agencies.

"As today's report shows, Ofgem will monitor the action of suppliers, large and small, and the way they treat customers who are in debt and need help."

Citizens Advice chief executive Gillian Guy said: "Recent rises in energy prices have put a strain on already tight budgets. Not only are people getting into debt with their supplier, some are using payday loans or credit cards in order to cover the cost of their bills.

"It is good that the number of disconnections is reducing, but there is still a long way to go.

"If you are falling behind with your energy bill you should get in touch with your supplier straight away as they have a duty to help you. Your supplier could cut you off if they don't realise you are struggling financially."
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