Switch option for energy customers
Sunday 23 September 2012
Tens of thousands of struggling households who owe money to their energy supplier will be freed up to switch to cheaper deals as part of a raft of measures announced today.
The biggest six energy suppliers - British Gas, EDF, Eon, SSE, Scottish Power and npower - will allow customers on prepayment meters with debts of up to £500 to switch from November 1 in a bid to help them cope with utility prices which have jumped sharply in recent years.
Currently, only customers with debts of £200 or less are allowed to switch.
There are some 320,000 gas and 315,000 electricity customers with prepayment meters who owe money to their supplier, according to energy regulator Ofgem, and it is thought tens of thousands will be helped by the move.
In most cases they racked up the debts when they were allowed credit and were slapped with prepayment meters as part of a repayment plan.
The increase in the threshold at which customers can switch will be backed by a drive from suppliers to raise awareness of switching and making it easier to switch.
Allowing consumers to switch should help them repay their debts more easily.
The latest initiative is part of Ofgem's push to encourage suppliers to work more effectively with households to resolve debt issues and use disconnection as a last resort.
Ofgem is due to report figures next week that will show a 59% fall in the number of people disconnected from their gas supply and a 54% drop in electricity disconnections, partly as a result of people being given more time to repay debts.
However, the average amount of debt people are repaying on their gas accounts rose to £371 in 2011, up from £339 the previous year. Meanwhile, the average electricity debt fell slightly to £357.
Sarah Harrison, senior partner for sustainable development at Ofgem, said: "We are acutely aware of the increasing financial pressures faced by many consumers, particularly those who are in the most vulnerable circumstances.
"We welcome the significant falls in the number of households being disconnected, but Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt.
"That's why we are pleased to announce a commitment from major suppliers which will permit tens of thousands more prepayment meter consumers in debt to choose the cheapest energy deal."
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...
£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...