With the cost of living still rising, and the price cap on energy bills set to soar once again later in the year, many people are worrying about how to make ends meet, with searches of the term “can’t pay my bills” up 2,400 per cent in the last seven days.
An anonymous campaign by Don’t Pay UK has been gaining momentum in recent weeks, with the scheme encouraging people to stop paying their energy bills this winter in an attempt to reduce the cost. However, consumers have been warned against taking part in this trend as it can have devastating consequences on your finances long-term, and see supplies cut off when they’re needed most.
The Manchester Evening News looked at steps customers can take to pay at least part of their bills, and how you can avoid having your energy supply shut off.
READ MORE: Work out how much more you could be paying for energy with this calculator
First steps
The first thing you need to do if you’re genuinely concerned about being able to pay your bill in full is to contact your supplier. Although it may sound counterintuitive, letting them know is a good starting point as there are different payment plans that can be discussed to ensure you pay at least part of what you owe, allowing your supply to remain intact. Some suppliers also have hardship funds or grants that can be given out to those in need, and the cash could be enough to cover your bill.
Payment plans
Your supplier has to help you come to a solution to pay your bills, and so should agree to putting you on a payment plan if you request it, or tell them that you’re unable to pay. The plan will look at what you owe, what you can afford to pay based on your income, outgoings, and any other debts, and how much energy you’re likely to use based on your past usage.
Once all of this has been calculated, fixed instalments over a set period of time will be suggested to help you pay what you can afford, although it’s a good idea to keep sending readings from your gas and electricity meters to make sure your bill is accurate and you’re not overpaying.
Payment holidays
If you have no spare money to set up a payment plan, a payment break or payment holiday may be an option. Discussing your situation with your supplier, and being open and honest about your means, any outgoings that you might not have budgeted for such as emergency repairs, and why you’re not able to meet those payments could see your supplier agree to a short break where you don’t need to make payments. However, it’s important to know exactly when this holiday will end as missing payments afterwards could see your supplier chase you for money, and might put you at risk of having a prepayment metre installed or even your supply cut off.
The debt respite scheme is also available for people struggling, which sees your debts put on hold for up to 60 days, where creditors can’t chase you for money or add interest or fees to your debt. It’s not available to everyone though, but charities like StepChange can help guide you through the process if you’re eligible.
Fuel Direct scheme
If you’re on certain benefits, and are struggling to pay your energy bills, it may be possible to pay your bills directly from your benefit payments through the fuel direct scheme. The Department for Work and Pensions will agree a sum that can be taken from your benefit payments each month, usually around five per cent, and be paid directly to your supplier. This money will then go towards paying off your ongoing energy use, as well as any debts you’ve racked up. Contact the jobcentre, or the pension service if you’re receiving pension credits, with the details of who you owe money to and how much, your customer reference number on bills, and your National Insurance number to arrange.
The scheme is available for people receiving:
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Income Support
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Income-Based Jobseeker’s Allowance
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Income-related Employment and Support Allowance
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Universal Credit
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Pension Credit
Government help
There are a number of different ways you can access help from the Government to cope with the rising cost of living. These include:
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A £400 energy grant to all households with a domestic electricity meter paid between October 2022 and March 2023
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A £650 payment to households on means-tested benefits like child tax credit, universal credit, income support and pension credit
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An extra £300 top-up to the Winter Fuel Payment for households with someone over the state pension age, 66, a one-off £150 payment for people on disability benefits like personal independence payment, disability living allowance, or the armed forces independence payment.
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A £150 sum towards bills under the Warm Home Discount scheme, helping vulnerable people pay for energy by taking it off bills or giving top-up vouchers to those on pension credit or certain means-tested benefits like universal credit or income support who have “high energy costs”.
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A £25 payment under the Cold Weather Payment scheme for those on certain benefits when the average temperature is, or is forecast to be, 0C or below for seven days in a row.
Free energy saving devices
According to Money Saving Expert, the site founded and run by money-guru Martin Lewis, there are several schemes available for people on low incomes which could help improve the efficiency of your home, saving money in the long run. The schemes fall under the Energy Company Obligation scheme, and include free insulation, and boiler repair or replacement.
People receiving pension credits, child tax credits, or means tested benefits like universal credit or income support are eligible for the scheme, which sees suppliers like British Gas, Bulb, E.on, and Ovo offer customers home improvements like wall cavity or loft insulation or upgraded boilers to improve the efficiency and help keep the cost of heating your home down.
The region also has the Greater Manchester Green Homes Grant, a Government-funded initiative proving free energy efficiency measures such as window and door improvements, low carbon heating methods like air source heat pumps, smart heating controls and insulation for people with a gross annual combined household income of under £30,000 living in homes with a low Energy Performance Certificate rating - E, F, or G. This scheme could see up to £10,000 of improvements fitted to your home.
Other support
Councils across England have been given access to a pool of cash to help those most in need post-pandemic, but the Government recently announced an extension of the scheme into March next year, helping people with the pressures of the cost of living crisis. Although the eligibility criteria varies from council to council, some local authorities in the region have help available to those who aren’t in receipt of benefits but are still struggling, so it’s worth reaching out to your local council to see whether they can help you.
Coun Amanda Chadderton, leader of Oldham Council and the lead for Greater Manchester's cost of living response is keen to find a solution for people. She said: “I know the rising cost of living is on everyone’s mind. It’s impossible to ignore the price of food going up in the shops and the ongoing dire warnings about increasing energy prices this autumn and winter. Please know that no matter where you live your local council will have help and support available for you if you need it.
"In Oldham, we have our We Can Help campaign which gives advice on areas such as emergency welfare support, managing your money, food, helping to heat your home and more. Your council will likely have something similar so I’d encourage anyone who’s struggling or think they might in the future to reach out and see what help is available for you. Greater Manchester have recently launched their Helping Hand campaign which can point you in the right direction if you’re not sure where to get started.
“I’d also encourage families to see what free activities are being put on where they live over the summer, as going on no or low cost days out can really help when moneys tight. For pensioners, make sure you’re claiming all of the pension credit available to you as thousands are currently not claiming what they are fully entitled to. It’s unacceptable that in a wealthy country like ours so many people should be pushed to the point of having to decide between spending their money on heating their home or feeding their family. As the Greater Manchester lead for the cost of living crisis I’ll be continuing to push the Government to do more to help ordinary people who are suffering through absolutely no fault of their own.”
Charity support
There are various charities offering free advice around debt and paying your bills, although many of them have seen a huge surge in demand as the cost of living crisis really hits home so you need to be patient if reaching out. Morgan Wild, head of policy at Citizens Advice, said: “The cost-of-living crisis is already having a devastating impact on people’s lives. Every day we hear from people who can’t afford to turn the lights on or cook their kids a hot meal.
“The government did the right thing by bringing in targeted support, but it won’t be enough for people to manage these previously unthinkable price hikes. The obvious place to start is to increase benefits to keep pace with the cost of living. There’s no time to waste.”
Charities include:
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National Energy Action, a fuel poverty and energy efficiency charity
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Citizens Advice, a charity to help people facing debt, hardship, or concerns
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StepChange, a debt charity
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MoneyHelper, a money charity sponsored by the Department for Work and Pensions,
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National Debt Line, a debt charity
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Age UK, a charity for over 60s offering advice over the energy crisis
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Scope, a disability equality charity offering advice over the energy crisis
Approaching energy firms for help
Several energy firms have charitable trusts or funds that can help people who are really struggling to pay their bills. British Gas has a scheme open to anyone, not just customers, where people can get up to £1,500 towards their bills under the British Gas Energy Trust, but the application process is very in-depth.
A spokesperson for British Gas said: “Since the start of the energy crisis, we've been working closely with the government and the regulator to explore how best to protect customers from the global forces driving energy prices upwards. We’ve raised awareness through our Stop the Silence campaign, to encourage people to come forward and seek help with their energy debts. We have a long history of support offered via the British Gas Energy Trust – through this we support both British Gas and non-British Gas customers.”
Some other large firms have their own funds specifically for customers, with Scottish Power, EDF, Ovo, and E.on all putting cash into a fund for customers who are really struggling. Most applicants will need to have spoken to a debt adviser before applying. A full budget showing your income and outgoings, proof of your income, and information on how your debts have built up are all often asked for by applicants, although the exact criteria varies for each scheme.
What happens if you don’t pay?
If you really can’t pay, then there are several things that could happen. Your supplier may attempt to move you onto a prepayment metre to avoid you accumulating more debt, but they cannot do this if you dispute the amount of money you owe them, particularly if you think your bill has been miscalculated. A supplier can say they’re going to cut off your energy supply, but this is often a last-case scenario.
If you have reached state pension age, your supplier cannot disconnect your supply between October 1 and March 31 if you live alone, or you only live with other people at the state pension age or children under 18,
Missing a payment may not affect your credit score as the bills are not loans, but you might find it harder to borrow money in the future as some suppliers report missed payments to credit agencies. Unless your bills are included in the rent, you’re unlikely to be threatened with eviction from a rented property if you miss a payment, but if bills are included in rent your landlord might be able to evict you for being in rent arrears. Lack of payments shouldn’t impact your mortgage, but you may find it tougher to re-mortgage or take out a new mortgage later down the line.
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