If you're facing disconnection due to a debt, here's where you stand and what you should do.
Earlier this week I wrote about the huge numbers of people in fuel poverty and some tips if you're struggling with your energy bills. (See The Big Six Energy Suppliers Vs The Rest.) Here's some more information to help you if you're struggling with your bills.
Suppliers can disconnect most people
If you don't reach an agreement with your supplier about settling your debt, it can, unfortunately, disconnect almost everyone. In fact, there is no disconnection exception for families with small children, or those with big children either.
Suppliers can't disconnect everyone though. They can't disconnect you:
- if your debt is with a previous supplier, not the current one.
- if your debt is unrelated to your gas and electricity consumption (e.g. if you default on the repayments of a boiler bought from the supplier).
- when you're officially declared bankrupt.
- if you're an elderly or chronically sick customer during the winter months (October to March).
How to get reconnected
In the event of a disconnection, your supplier will give you instructions on how to get reconnected. The most important points are:
- Reconnection charges usually apply, and it usually happens after a debt settlement has been agreed only.
- The supplier may suggest to install a prepayment meter at the property in order to reconnect. While this may be tempting, you should know that getting your energy through these meters costs about 20% more, which will not help you with your debt problems in the future!
- Reconnection can take a week or more, as an engineer will have to come to the property. It's better to keep talking with your supplier to avoid disconnection in the first place.
Interest free reconnection loan
You may be able to get an interest-free Crisis Loan through the Department of Work and Pensions if you can't afford the reconnection fee. You will have to prove that you genuinely can't afford the fee, so this is an option of last resort only. You can read more about the Crisis Loan here and here.
Reduce your consumption
Paying more for each unit of gas and electricity is hard to avoid given the recent price increases but, by using less energy, it's still possible to take the edge off price increases.
These aren't new ideas, but if you're all set to look at ways to reduce your energy bills, you should trawl through the Energy Saving Trust website. You can also check there to see if you're eligible for a free home-insulation improvement grant.
More free services
Energy suppliers provide a number of free services that you may be able to receive. To read about them, go here.
Most important in dealing with energy debt
If you have an energy debt, it is most important that you don't ignore it. Your supplier must offer you options if you're in trouble. Just by contacting them to talk about the problem you will be buying yourself valuable time.
My huge thanks once again to Florian Ritzmann of Xelector (which powers The Fool's comparison tool) for his help with this article. He basically wrote it, although I'm certain he'll want to distance himself from my 'big children' wise-crack.
> Compare gas and electricity prices via Fool.co.uk