“Energy suppliers are still too slow at helping the rising number of customers deal with debt,” says Ofgem.
Last year, the regulator’s annual report on vulnerable customers showed the overall number of customers in debt rose by 4.2% to 1.31 million for electricity and 4.8% to 1.05 million for gas customers.
The number of indebted customers on repayment plans rose slightly (1% for electricity and 0.4% for gas) but was outweighed by the increase in the number of those that owed money but were not put on any plan (an increase of 8% for electricity and 10% for gas).
Suppliers are obliged under Ofgem’s rules to help their customers manage debt, including putting them on an affordable repayment plan.
“According to figures contained in the report, the poor pace shown by suppliers in revising tariff plans has potentially pushed already-indebted customers further into debt
However, it found that suppliers are getting better at helping vulnerable customers manage energy day-to-day (more than 850,000 electricity customers and 650,000 gas customers received free services through suppliers’ priority service).
Mary Starks, executive director for consumers and markets at Ofgem said, “We are pleased that suppliers are making such good progress on getting extra help to vulnerable customers that need it, for example, making their bills easier to access or read.”
“However, some suppliers are simply not keeping up with the rising number of customers who owe them money. It’s imperative that suppliers move quickly and efficiently to help the struggling customers manage paying back their debts, or risk pushing them further into hardship.”
The number of disconnections as a result of debt also fell to a low record last year, with just six electricity disconnections and no gas disconnections.
There was, however, a more than three-fold rise in the number of smart meters switched remotely by suppliers from credit to prepayment mode to ensure repayment of outstanding debt, totalling 70,000 last year.
The number of prepayment meters forcibly installed by suppliers under warrant to collect a debt fell by 15% to 71,000.
Story edited by Isipho Gxowa as part of a high school intern programme