Energy customers face rise in bills to cover bad debts | UK | News

December 16, 2023
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The amount owed by ­customers has rocketed to a record high during the costs crisis.

Industry regulator Ofgem yesterday announced proposals to enable suppliers to claw back the money.

Its solution is a one-off £16 to be added to its regulated price cap next April, to be paid between then and the following March.

The move would mean an extra £1.33 a month, it said.

But it comes as households are already braced for a rise in the price cap – which applies to the vast majority of customers – to an average £1,928 a year from January 1.

The cap is reviewed every three months, so the limit from April will be assessed in the new year. Tim Jarvis, director general for markets at Ofgem, said: “The record level of debt in the system means we must take action to make sure suppliers can recover their reasonable costs, so the market remains resilient, and suppliers are offering consumers support in managing their debts.

“The proposals set out today are not something we take lightly. However, we feel they are necessary to address this issue.”

Ofgem said the add-on would ensure suppliers could set up ­payment plans for those struggling, write off unmanageable debt on a case-by-case basis and arrange affordable repayment holidays. It will not be passed on to customers with pre-payment meters.

David Cheadle, of the Money Advice Trust, said: “Energy debt is soaring, reaching record levels and rising by almost £1billion this year.

“Behind these figures are millions of people trapped in energy debt, worried about being able to properly heat their homes this winter.”

Richard Neudegg, of the website Uswitch.com, said: “If suppliers can’t cover bad debts, it can lead them to more aggressively chase those in vulnerable situations.”



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