20 November 2024
Background
Energy prices are still significantly higher than they were in late 2021, when gas prices started to rise due to recovery from the pandemic and have since been sustained by ongoing geopolitical events. As prices have risen, customers have had to make adjustments to manage their bills, and many households are still struggling to cope.
The latest data from the energy regulator Ofgem shows that there is a record £3.7 billion of debt and arrears owed to energy suppliers, an unprecedented increase of over £1.5 billion since the start of 2023. The average household in arrears (those who do not have an arrangement to repay their debt) owes over £1,500 on their electricity bill and over £1,300 on their gas.[1]
Since late 2021, energy suppliers have voluntarily offered hundreds of millions of pounds of extra support for customers. Energy suppliers’ overall commitments to additional support for customers during this coming winter (2024 / 2025) stands at over £500 million.[2]
In addition to financial support, energy suppliers continually seek to improve the services they offer customers, including investing heavily in new staff, training and systems to help people get the advice and support they need. Suppliers have also worked with Ofgem, the energy regulator, to implement new customer standards, including ease of contact. Ofgem data shows that energy suppliers’ ability to deal with customer queries has significantly improved.[3]
To ensure those who need the most support can be quickly identified and aided, 13 energy suppliers covering more than 95% of homes are additionally signed up to Energy UK’s Vulnerability Commitment, which focuses specifically on vulnerable customers and has been in place since 2020. More information is included in the appendix.
Energy suppliers are playing their part in supporting customers; however, an enduring solution is needed to address the wider challenge of affordability. The industry welcomes the Government and Ofgem’s focus on addressing customer debt and affordability challenges, and agrees it is important to find a long-term policy solution to support those who are in difficulty.
The Winter 2024 Commitment
Energy UK has worked with its members to develop a commitment to household customers during winter 2024.
In addition to making this commitment, 15 suppliers covering almost the entire market will continue to ensure:
- the support available for customers is clear;
- their staff will strive to understand customers’ circumstances with empathy and compassion; and,
- that they will share good practice from across the industry about different ways that energy suppliers are investing in improving the relationships with their customers.
Consistent with these important themes, the additional support on offer will vary by company and suppliers will strive to ensure they are tailoring support to their customers’ needs.
Winter 2024 Commitment signatories
Information for customers
- If you are struggling to pay your energy bills or need additional support, you should always contact your energy supplier.
- There are lots of ways they can help you or advise where you can get help, but they can only do this if they are aware of your situation
- If you need help finding who your energy supplier is, this page will help.
- If you are in energy debt, Citizens Advice recommends you:
- Speak to your energy supplier
- Seek debt advice
- Save energy through energy efficiency
As part of the Winter 2024 Commitment, suppliers will:
1. Offer financial assistance to those most in need
- Over the crisis hundreds of millions of pounds have been voluntarily made available for additional support for customers struggling to pay. This is on top of the statutory obligations (e.g. not including spend on the Warm Home Discount and on Additional Support Credit for prepayment customers).
- Supplier assistance programmes and funds are set out in detail on the Energy UK website for each supplier and cover a range of support areas which may include:
- credit on bills or prepayment meters;
- enhanced debt write-off schemes and hardship funds;
- enhanced funding to charity partners and frontline organisations;
- reducing or waiving the standing charges over winter for certain customers;
- and, access to energy-saving devices and technology.
- If a customer’s ability to heat and run their home is affected by the withdrawal of the Winter Fuel Payment, they should engage with their energy company at the earliest opportunity. Energy suppliers will be able to advise on different support options, and some may be able to provide income maximisation advice and help people understand eligibility around Pension Credit.
Since the gas crisis (late 2021) energy suppliers have provided hundreds of millions of pounds in financial support to those most in need, and this winter, suppliers are expected to spend that much again on additional support for customers.
2. Continually seek to improve in helping their customers
- Energy suppliers have reviewed and, where necessary, updated their staff training and debt communications in pursuit of best practice for their customers. This includes delivering training for frontline staff, working with external organisations on customer referrals, and information and training on activities that support improved bill accuracy.
- Suppliers will fully consider information (including budgets, affordable payment offers and prepared Standard Financial Statements) and third-party authority forms from a customer’s chosen credible debt or consumer organisation, including FCA-authorised debt advisors.
- Energy suppliers will continue to invest in establishing impactful partnerships with charities and debt advice organisations to help provide signposting and additional advice for vulnerable customers who are in arrears.
Ofgem data shows that energy suppliers’ ability to deal better with customer queries has significantly improved.[4]
3. Consider the individual circumstances of customers
- Continue to proactively identify and support customers struggling to pay their bills and ensure repayment plans reflect their ability to pay (including the use of payment holidays where appropriate).
- Policies for High Court enforcement and County Court Judgement (CCJ) actions for debt cannot be signed off unless agreed at board level or equivalent.
- Suppliers can also help customers access a government scheme called Breathing Space – which gives customers legal protections from creditor action for up to 60 days, or as long as a mental health crisis lasts.
In addition, those signed up to Energy UK’s Vulnerability Commitment:[6]
- Only use High Court Enforcement Officers to recover debts where appropriate for a vulnerable customer, taking consideration of any wider vulnerabilities that may be exacerbated by Court enforcement action.
- Track how vulnerabilities may change over time to ensure debt repayment plans are genuinely affordable.
4. Support a national debt advice campaign this winter
Energy suppliers want to get the message to all customers that they should never be suffering in silence about energy affordability, and are partners in the Speak, Seek, Save campaign led by Citizens Advice for this winter that started on 1 October.
Support from energy suppliers includes a financial contribution towards the campaign.
As part of the campaign, information and advice has been translated into ten commonly spoken languages (Arabic, Traditional Chinese, Farsi, Indian Punjabi, Kurdish Sorani, Polish, Portuguese, Romanian, Russian and Urdu) to support as many communities and individuals as possible.[3]
Citizens Advice and Energy UK have been working with the Government and Ofgem to increase the reach of the campaign through charities, consumer groups and organisations such as the Post Office. In addition, they have engaged with Scottish consumer groups as support and advice differs from England and Wales. The campaign seeks to reach those of pensionable age impacted by the removal of Winter Fuel Payments.
Read further information on the Citizens Advice website.
This Commitment applies from 1 October 2024 through to 31 March 2025.
Further information
The Energy UK Vulnerability Commitment
Thirteen energy suppliers representing more than 95% of UK homes are signed up to the Energy UK Vulnerability Commitment, which has been in place since 2020.
This is a voluntary commitment, over and above existing regulation. Signatories are scrutinised by an independent panel each year and required to evidence their activities.
This year the Vulnerability Commitment panel focused on three key areas:
- the processes in place to define and identify the most vulnerable customers;
- how energy suppliers use innovative routes to ensure they are offering affordable repayment plans; and,
- the steps energy suppliers take to monitor customers on prepayment meters who might be at risk of self-disconnection.
Examples of good practice are included in the 2024 Vulnerability Commitment Good Practice Guide published on 1 October 2024, to ensure learnings can be widely shared across the sector.
Find further information on the additional support that suppliers provide..
[1] Ofgem (2024), Consumer impacts of market conditions survey: wave 5 (January to February 2024) Ofgem survey shows that now three in five (60%) said they trust their own supplier to treat them fairly
[2] More information below
[3] Resources are available here for anyone to use: https://bit.ly/SpeakSeekSavePartnerPack
[4] Debt and Arrears Indicators | Ofgem
[5] This represents the estimated supplier allocation of voluntary support provided from the majority of the domestic energy supply market from Oct 24 – until April 25. This excludes: Statutory programmes (eg ECO and WHD); Accounting debt write-offs for financial purposes as opposed to discretionary write-offs to support individual households; Customer service spend; and Additional support credit. It includes the best available information on temporary payment holidays where customers are allowed to defer their payment until later.
[6] Ofgem (2024), Consumer impacts of market conditions survey: wave 5 (January to February 2024) Ofgem survey shows that now three in five (60%) said they trust their own supplier to treat them fairly