Utility Peps up bill payments

Northern Electric, the Newcastle-based utility, has teamed up with Family Assurance Friendly Society based in Brighton to launch Energy Reserve, a savings plan to help customers build up tax-free capital to help pay future bills.

It follows hard on the heels of the Goldfish credit card issued by British Gas which earns bonus points to help pay gas bills. It could be the start of a whole series of special services offered by utility companies, taking advantage of their vast customer bases and central billing systems to generate income to supplement the declining profits from their core business as a result of tighter price controls.

Northern Electric consumers will be invited to invest a minimum of pounds 12 a month into a personal equity plan operated and managed by Family Assurance, to build up tax-free income. Payments can start, and stop, increase and decrease at any time without penalty.

The investment buys up to pounds 50 a month of accident, sickness and redundancy insurance payable for 12 months. The insurance costs pounds 1.50, the balance is invested in the Family Asset Plan, and the capital and income can be used to pay electricity bills or for any other purpose.

The minimum contribution is less than half that which applies to conventional PEP plans.