Planning & Budgeting

Suppliers to offer emergency help to pay for energy bills during Covid-19 pandemic

· 3 min read

Energy regulator Ofgem has revealed new regulations that it plans to introduce in December, which will help people struggling to pay their energy bills during the winter months. 

Energy regulator Ofgem has revealed new regulations that it plans to introduce in December, which will help people struggling to pay their energy bills during the winter months. 

Employers placing workers on furlough meant that millions of workers were only receiving a portion of their wages over the past months. Amidst these challenging times, thousands of households had a harder time making ends meet. When the COVID-19 pandemic first peaked in March, energy suppliers voluntarily agreed with the government to help people who had been badly affected. 

Ofgem has recently updated their license rules to ensure suppliers keep their promise to consumers, making it easier for them to obtain energy during this challenging time.  

The new regulations stipulate that suppliers have to offer emergency credit to customers unable to top up prepayment meters. If customers find themselves in debt, then suppliers must put them on 'realistic' and 'sustainable' repayment plans. The motive behind this is to give a helping hand to customers who have difficulties in topping up their prepayment meters or the inability to visit local shops due to local quarantine restrictions or mobility issues.

While in the past, people who were unable to pay their bills faced energy cut-offs by their suppliers, Ofgem has been pushing for energy suppliers to revise regulations to ensure that every citizen has access to energy, even in scenarios where they may find it challenging to pay for it immediately.

Ofgem's announcement will be welcome news to millions of people who have been struggling to pay their bills due to the economic fallout of the pandemic. A recent survey by Citizens’ Advice revealed that approximately 6 million adults in the UK had fallen behind on the payment of at least one household bill. Energy bills were ranked third on the list, with a total of 2.8 million people unable to pay for their household energy usage.  

Citizen Advice's chief executive, Dame Gillian Guy, welcomed Ofgem’s initiative, saying, "This raft of new protections from Ofgem should help more people who are struggling to stay afloat. Energy is an essential service, and everyone should be confident they can adequately heat their home and protect their health - especially during a global pandemic.”

She added, “We've been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we're very pleased to see this announcement from the regulator."

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The effect of COVID-19 on the economy has pushed the UK into serious debt, which will take years, if not months, to get out of. The survey also said that even with help from the organization, it would take the average person in the UK around 30 months to pay off their outstanding bills assuming they use all their spendable income.

The new regulations will provide some welcome leeway to households unable to pay their energy bills immediately. However, Ofgem was clear that every consumer would eventually have to pay for the energy they use.

Rhea Tibrewala
Rhea Tibrewala
Rhea has had over 5 years of experience in the finance sector, having worked as a digital marketing manager for leading financial institutions across multiple geographies. She is a tech fanatic, an avid reader, and enjoys travelling and music in her free time.
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