Power customers ‘need debt holiday’


Published: Wednesday 24th December 2014 by The News Editor

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A charity has called on energy companies to give their prepayment customers the “Christmas bonus” of a debt holiday until the summer when bills are lower.

Citizens Advice said prepayment customers, whose meters are often installed to recoup debts and who use a proportion of each top-up to cut down arrears, spent twice as much on their gas in winter compared to summer.

It said delaying debt repayments until the weather warmed up could prevent significant numbers of prepayment customers having to ration heat and hot water or cutting off their supply altogether.

New figures showed a 66% increase in the number of people seeking online help about problems paying fuel bills between January and March compared to the rest of this year.

Ofgem’s Domestic Suppliers’ Social Obligation in 2013 report published last week showed around 300,000 new gas and 300,000 new electricity prepayment meters were installed last year, up 20% on 2012.

Some 80% of new installations were for customers who had debts, or around 230,000 households in each case.

At the end of 2013, the number of electricity and gas accounts with a customer repaying debt increased by 13% and 17% respectively, compared to the end of 2012.

Citizens Advice said its own survey had found prepayment customers were more likely to spend £20 or more each week in winter on gas compared to less than £10 a week in summer.

Last year Scottish Power offered its prepayment customers a debt holiday. Citizens Advice has written to all suppliers asking them to offer a similar break.

Citizens Advice chief executive Gillian Guy said: “Delaying payments for debts will mean those people struggling to afford heat and light don’t have to make severe cut-backs.

“Energy suppliers have a real opportunity to help prepay customers this winter and begin to rebuild customers’ trust. Prepay customers can pay an average of £80 more a year on gas and electricity.”

The charity said it also wanted energy companies to offer customers more options to top up other than going to a local store, a task that could be more difficult in winter weather.

A Department of Energy and Climate Change spokeswoman said: ” We are working hard to make Britain’s homes warmer for less this winter.

“The Government is already giving households a Christmas bonus of £12 off their energy bills as part of our promise to cut bills by an average of £50 this year.

“We urge prepayment meter customers to redeem their £12 voucher next time they top up.”

Published: Wednesday 24th December 2014 by The News Editor

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