Citizens Advice have seen an increase in clients with energy debt problems. Nearly half of those they helped had a long term health condition or disability.
In recent years the energy regulator, Ofgem, has reported an increasing number of people falling behind on their bills without an arrangement to repay in place, leaving them at risk of building up unmanageable debts.
Energy companies can use prepayment meters (PPMs) to collect debt from consumers who owe them money. Last year Citizens Advice published research that showed 140,000 people a year couldn’t afford to top up their meter, with those repaying a debt through their meter at much higher risk of being disconnected.
Research by Citizens Advice has found for people in vulnerable circumstances, PPMs are not always a safe way of managing their energy.
The research found 3 key things:
- People in vulnerable circumstances face specific barriers to engaging with their energy supplier
Vanessa*, 45, lives with her 2 children in a rural area and has severe vision problems, which have worsened over the last 5 years. She has problems reading her meter and her driving licence has been revoked. Vanessa, like many others, is unaware of the support available to her.
Physical and mental health conditions can make day-to-day activities, such as reading post, speaking on the phone, or generally coping with problems, much more difficult. Our recent research about people with mental health conditions found they often pay extra for their essential services. People can also face other barriers to dealing with energy debt problems, such as a life shock, losing someone close or having caring responsibilities.
- Debt collection processes viewed as ‘aggressive’ by people might exacerbate their vulnerability and put them off engaging
Felix*, 34, has depression and anxiety. He tried to agree a payment plan with his supplier but they insisted on an unmanageable amount. He started getting text messages saying he was at risk of disconnection. This caused distress and exacerbated his mental health conditions.
Aggressive messages or inconsistency in the tone and content of communications from a supplier can create anxiety and stress, leaving people unsure about where they stand. This can damage trust in their suppliers and make people less likely to ask for help.
- Support is often framed in a way that sounds generic and unhelpful
Rachel*, 28, is a single parent of a 3 year old. She’s working as a midwife for less than 16 hours per week because childcare costs would be unaffordable. Her supplier offered her debt advice but Rachel felt this wasn’t tailored to her situation and wasn’t a genuine offer of help.
Without relevant information and examples of support, the value of making referrals can be lost.
Citizens Advice think there are 3 key ways to improve the situation for these consumers. They have forwarded these to suppliers and Ofgem:
- Suppliers should have a comprehensive package of support to help people to see a way out of their situation and be involved in decisions.
- Suppliers should be consistent across their communications and emphasise the benefits of engagement.
- Ofgem should use its Vulnerability Strategy to set an ambitious vision for supporting people in vulnerable circumstances who fall behind on their bills.
(This article has been adapted from an original https://wearecitizensadvice.org.uk/how-vulnerability-can-make-falling-behind-on-energy-bills-even-worse-f435c10b2637)
*Names have been changed to protect identity.