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Ofgem Urges Energy Suppliers to Make Covid-19 Support Permanent for Vulnerable Customers

Ofgem, the energy industry regulator has set out plans to make some of the measures that are designed to protect vulnerable energy customers permanent, especially those that are struggling financially during the coronavirus crisis. These rules could be a permanent component of its oversight from later this year.

The regulator will call on energy suppliers to offer emergency top-up vouchers or breathing room for late payments for those customers who are in financial difficulty. This will allow them to top up their gas and electricity meter, ensuring they still have energy when they need it most. Although these measures are currently voluntary, they may become standard practice across the industry.

Jonathan Brearley, chief executive of Ofgem, believes these new rules would lower the number of customers that have to go without heating and lighting as a result of not having the means to top up their prepaid meters.

Earlier in March, energy suppliers voluntarily signed up to these new measures to assist those heavily affected by the government’s lockdown restrictions. However, under these new plans, the rules will be made permanent by Ofgem.

Brearley added: “It is always best for customers to keep up with their energy bills if they can, but at this time when many may face financial hardship, these proposals mean those who are struggling to keep up are assured of some breathing space.”

These new proposals which offer extra help for those who are vulnerable come less than a week after the regulator allowed suppliers to use debt collection agencies to collect unpaid bills again.

Furthermore, Brearley forewarned against “sharp practice or aggressive debt collection” and urged providers to “give careful consideration to the customer’s circumstances and ability to pay”.

Under existing rules, energy suppliers should only disconnect a home’s gas or electricity supply over unpaid bills as a last resort. However, around four million homes in the UK utilise pre-payment energy meters, these already lead to “self-disconnection” if a customer is unable to top-up the required amount.

With the new rules, suppliers may have to offer an emergency line of credit between £5 and £20 to those who run out of credit overnight or during bank holidays, in addition to those who can’t afford to top-up. Repayment plans must also be agreed with customers when they are unable to make bill payments on time.

The regulator did highlight that a number of suppliers already offer help and energy meter credit to affected customers. Nevertheless, making the rules permanent through the official energy supply licence code means they will be standard practise across the industry.

During these unprecedented times, such a move is welcome and will hopefully go a long way to support those who need it most. While positive, more needs to be done to eradicate fuel poverty in the UK.

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Chris Richards

Chris is a personal finance specialist who founded Council Tax Advisors in 2012, assisting over 250,000 people with their Council Tax debt. Observing that many clients overpaid on utilities, he launched Utility Saving Expert in 2014, an energy price comparison site. In 2016, the platform expanded its services to include consumer and business insurance comparisons. Utility Saving Expert stands out with its commitment to social responsibility, donating 10% of net profits to fuel poverty charities, underscoring its dedication to both client value and community support.

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