An energy bill debt holiday may be on the way

There has been over a 20% year on year increase in the number of people that are in arrears to their fuel provider. This has lead to an increase in calls for a debt holiday during the winter months, and many organisations such as StepChange and Citizens Advice Bureau are bringing more visibility to this problem facing the low income in the UK.

The numbers are not good. Over 6 percent of households are in arrears, which is equal to almost 3 million customers. Many will be threatened with a shut off of their gas, and if this happens, scores of people could be faced with a health risk or even death without heat. This is particularity true for the elderly across the UK.

With more people using prepayment meters, and over 600,000 new ones that were installed in 2014, the number of families that can be helped by a holiday on their outstanding debts continues to increase. Some providers, such as Scottish Power, have offered debt holidays to the low income in the past, but only if they had a prepayment meter. So regulators are trying to get more of the Big Six Energy companies, such as British Gas and EDF Energy, to follow suit.

There are other steps that people can take though while this is petition ongoing. The first thing to do is to call an energy supplier and ask for a repayment plan for the bills that are due. Also, many people do not know that some energy suppliers have overcharged their customers in the past, and in fact this is true for about 3.5 million people. So also ask the supplier if there are any credits that are due on an account in question.

Even if the holiday does not occur, the government has sent a £12 voucher to families on a prepayment meter. This was intended to help them offset the increasing cost of their heating bills, and people will need to use this voucher when they top off. If someone did not receive this rebate from the government, or needs more information on it, then Citizens Advice can help look into it.

Prepayment customers need this holiday during the winter months are their bills are almost twice as high during this time frame. The costs may be £20 or more each week during the colder months but it will drop to £10 during the summer, when the weather warms up. So the debt holiday that Citizens Advice calls for would be the most effective when heat needs to be used.

If there is a debt holiday, it will most likely only be for prepayment customers. It will not clear up all of the arrears that is due, but it in effect gives people time to pay off the bills, usually until the summer months. It is most critical for people to have their heat on during the winter months, so this would be the best time of the year for a debt holiday.

To help put pressure on suppliers, contact a local MP. Or Citizens Advice can provide more information on the petition process.