Major energy supplier to pay bills for tens of thousands of struggling customers to help with debts
A MAJOR energy supplier will help thousands of customers pay their bills under a new scheme.
British Gas, the country’s second-largest energy firm will help those who have fallen in to debt.
Struggling customers will be able to get part of their debts wiped via what’s known as debt matching.
For instance if a customer pays of £100, British Gas will pay off £100 too, effectively wiping half the amount owed and getting them back on track sooner.
The £15 million “You Pay: We Pay” scheme will open in June and eligible customers will be contacted directly – they won’t need to apply.
This will broadly include anyone considered to be in fuel poverty or who as sought debt advice, and the scheme is for those on prepayment meters as well as those who are billed.
You must be a British Gas customer for at least six months to be considered.
Energy suppliers have typically offered grants or repayment holidays to help customers manage their debts.
British Gas is the first energy firm to launch a debt matching scheme, but the help is available for other types of bills.
Households in debt with their water supplier have long been able to get help repaying their debts with similar schemes.
For example, Thames Water says that it will match any money you pay towards your water debt, pound for pound.
Severn Trent also has a similar version of the scheme called Matching Plus.
However some energy firms have wiped debts of struggling customers completely.
Grants given out to customers can also be used to clear debts.
Chris O’Shea, chief executive of British Gas owner Centrica said: “While it’s been good news that food and energy prices are falling, for many households the cost-of-living crisis is far from over, not least because of the more recent increases in rent and mortgage costs.
“That’s why we’ve put £140 million into supporting those who need help the most.
“We know debt can have a corrosive effect on mental health. Most people want to pay their bills, but it can be very difficult to pay for what you need and clear debts.
“We want to try and help customers wipe the debt slate clean with this new approach, and to put our customers on a better footing to recover from this period of high inflation.”
Debt Charity StepChange has called the scheme “innovative” and said that it’ll give those trapped in a debt spiral a new hope.
Richard Lane, chief client officer at the charity, said: “At StepChange, we know all too well that the rising cost-of-living has been devastating, pushing more and more families into debt.
“It’s great to see innovative approaches from companies like British Gas that have the potential to make a real impact for struggling households through this difficult period.”
Who’s eligible for the help?
British Gas said that tens of thousands of customers are eligible for the help.
These customers will be identified “proactively” and receive the support after an assessment by one of its specifically trained advisors.
This means customers do not need to contact British Gas to apply.
A detailed assessment would be made to determine if customers qualify for the scheme but broadly, they must:
- Be in or facing fuel poverty
- Must have obtained or will obtain debt advice
- Have been a British Gas customer for at least six months
- Pre-agree a payment amount following the assessment
Chris O’Shea added: “This scheme isn’t a silver bullet.
“How we support people who struggle to afford life’s basic necessities is a wider societal issue and this is why we are a strong advocate for the introduction of a social tariff.”
How will it work in practice?
If British Gas contacts you and tells you you’re eligible to receive support under its “You Pay: We Pay” scheme, you’ll need to agree to repay your debt.
For example, if you have a £1,000 debt on your British Gas account, you may be able to agree to pay it off over six months from June.
In this scenario, you could agree to repay £83 a month for the period.
British Gas would then top up these payments by another £83.
This means, in total, you’d be paying off £166 of your debt each month.
Multiply this by six monthly payments, and you’ll have paid off the £1,000 of arrears by December.
What other energy bill help is available?
THERE'S a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
What should I do if I fall into debt?
You should contact your supplier as early as possible to let them know if you’re struggling.
Energy debts are priority debts, which means there can be more severe consequences to not paying than with other types of debt.
Failing to engage with your supplier about your debt could also see them apply for a court warrant to forcibly install a prepayment meter in your home.
Once you’ve contacted your supplier about your debt problems, ask for an affordable repayment plan.
Your supplier should work with you to figure out a sensible amount you can pay towards your debts each month.
Your supplier may also allow you to apply for an energy grant.
These could be delivered as energy credits to help cover your debt, or your supplier might agree to wipe your outstanding balance.
Ask your supplier what’s on offer and how to apply.
How to get free debt help
There are several groups which can help you with your problem debts for free.
- Citizens Advice – 0800 144 8848 (England) / 0800 702 2020 (Wales)
- StepChange – 0800138 1111
- National Debtline – 0808 808 4000
- Debt Advice Foundation – 0800 043 4050
You can also find information about Debt Management Plans (DMP) and Individual Voluntary Agreements (IVA) by visiting MoneyHelper.org.uk or Gov.UK.
Speak to one of these organisations – don’t be tempted to use a claims management firm.
They say they can write off lots of your debt in return for a large upfront fee.
But there are other options where you don’t need to pay.